Department of RevenueTax and Water Revenue Bureaus

Department of RevenueTax and Water Revenue Bureaus

‣ Through Executive Orders, MOUs and revised business practices, the City checks the tax and water compliance status of individuals and businesses

‣ Revenue reviews tax and water records and will either:‣ Notify the participating agency of their vendors compliance

status or ‣ Mail letters to those who were checked for compliance

Compliance CertificationCompliance CertificationMechanism

Department of RevenueTax and Water Revenue Bureaus

New and current City vendors

All new hires seeking employment with the City of Philadelphia

Applicants wishing to participate in one of the City’s tax credit programs

Individuals nominated to the Mayor’s boards and commissions

Property owners going before the Zoning Board of Adjustments

Fire Losses and reimbursements from Philadelphia, due to property damage

Compliance CertificationCompliance CertificationParticipants

Department of RevenueTax and Water Revenue Bureaus

Expand the current on-line system to allow all persons who need compliance checks to produce their own compliance certificates.

Enter into MOUs with additional Universities and Quasi-Agencies to require tax compliance for all of their vendors.

Expand the program to the City’s large private businesses

Compliance CertificationCompliance CertificationNext Steps

Department of RevenueTax and Water Revenue Bureaus

‣ City Controller can withhold City employee paychecks up to 20% for tax delinquency

‣ May of 2009, 1,500 employees found to be delinquent

‣ Wage garnishment began January of 2010 for 450 employees

‣ To date, $3.2 million collected

Employee IndebtednessEmployee Indebtedness

Department of RevenueTax and Water Revenue Bureaus

‣ Investigators sent out to the stadium complex during sporting events

‣ Searching for rogue parking lots and grossly under remitting parking lots

‣ Audits set-up to determine all taxes owed

Investigations into Parking LotsInvestigations into Parking LotsMechanism

Department of RevenueTax and Water Revenue Bureaus

‣ $2 million in assessments in FY10 and FY11

‣ Switching focus to large clubs and concert venues

Results

Investigations into Parking LotsInvestigations into Parking Lots

Department of RevenueTax and Water Revenue Bureaus

Use External Data to Find Under Use External Data to Find Under ReportingReporting‣ Multiple External Data Sources

‣ IRS‣ Commonwealth‣ Other City Departments

‣ Want to expand the use of outside

Department of RevenueTax and Water Revenue Bureaus

‣ Use IRS EOAD files to send tax return adjustment letters

‣ Use IRS EOAD files to set up audits

‣ Assessed 162 businesses for $1.35 million in FY10 and FY11

Examination Operational Automation Examination Operational Automation Database (EOAD)Database (EOAD)

Department of RevenueTax and Water Revenue Bureaus

‣ Obtain liquor purchase data obtained from the PA Liquor Control Board

‣ Match reported sales of liquor for Philadelphia Liquor Tax against liquor purchase data to determine if the mark-up is within reason.

‣ Assessed 82 businesses for $4.85 million in FY10 and FY11

Liquor Tax AuditsLiquor Tax Audits

Department of RevenueTax and Water Revenue Bureaus

‣ Receive permit data from Department of Licenses and Inspections

‣ Compare value of job as listed on permit to tax filings

‣ Sharing of data is reciprocal. Revenue will report illegal permits to licenses and inspections

Electricians and PlumbersElectricians and Plumbers