Cutting Taxpayer Errors With Stronger Service Design: How More Citizen-centric Services Can Drive Superior Compliance

CUTTING
TAXPAYER
ERRORS WITH
STRONGER
SERVICE
DESIGN
How More Citizen-Centric
Services Can Drive
Superior Compliance
Featuring findingsfrom the
Accenture2017 TaxpayerSurvey

TAX ERRORS ARE WIDESPREAD
Copyright © 2018 Accenture. All rights reserved. 2
Thousands of little mistakes become a significant
burden on revenue agencies and taxpayers
Missing, inaccurate or
expired ID numbers
Errors in tax credits
or deductions
Missed
deadlines
Incorrectly
approximating figures
Spelling
mistakes
Incorrect Bank
account numbers
Mixed personal and
business expenses
Under- or
over-claiming
Inability to understand
obligations
Forms
not signed
Property
income errors
Wrong
date
Filing or working
status errors
Verification code/
PIN errors
Missed
deductions
Gross/net
confusion
Math
blunders
Misunderstanding form
fields
Incorrect
residency status
Miscalculated
dividend income

THE BURDEN OF ERRORS
How far can digital services
go to prevent taxpayer errors?
Revenue agencies lose billions globally to innocent,
misinformed and careless taxpayer errors that could be
prevented with better service design and digital systems.
On top of lost revenue, errors increase pressure on the
revenue agency workforce, with often tedious rectifications
lowering productivity and morale.
By intelligently automating revenue agency processes,
taxpayer errors can be reduced.
In the UK, £8 billion
(US$11.4 billion) a
year in tax is lost
from avoidable
taxpayer errors1
1 - https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital#introduction-to-making-tax-digital

ELIMINATING ERROR
How can we accelerate the extinction
of burdensome taxpayer errors?
Revenue agencies have already shown that
digitalization helps prevent and correct errors:
Almost 10 years ago (2009) the relatively new
e-File system (for tax returns) from the US Internal
Revenue Service (IRS) recorded an error rate of 9
percent, compared to 21 percent for paper returns.2
As digital filing has matured, errors have
decreased. The IRS today reports an error rate
for electronic returns of 0.5 percent.3
2
- https://www.treasury.gov/tigta/auditreports/2011reports/201130048fr.pdf
3
- https://www.irs.com/articles/pros-and-cons-e-filing-taxes
However, while this is impressive progress,
errors are still a major issue…
Digital error checking is still basic (covering, for
example, arithmetic and completeness) and less
obvious errors continue to flow through electronic
submissions, they just manifest later.
Beyond annual returns, many other submissions
and interactions are still reliant on paper forms.

Taxpayer errors remain
a major burden on
revenue agencies and
taxpayers alike…
“

INADVERTENT ERRORS ARE WIDESPREAD
Over two-thirds of respondents made
filing errors in the last two years
Have you made any taxpayer
errors in the last 24 months
while managing your taxes
and interacting with your tax
authority?
“
29%
31%
32%
35%
Responding to an audit / examination
Changing personal information
Registering/qualifying for taxes,
deductions, credits, and benefits
Filing or amending tax returns or
submitting other forms

ERRORS ARE FOUND BEFORE, DURING
AND AFTER SUBMISSION
Taxpayers resolve many of their own errors, while
many slip past automatic checks
31%
53%
36%
26%
44%
25%
29%
33%
25%22%
35%
41%
Filing/amending tax
returns or submitting other
forms
Registering/qualifying for
taxes, deductions, credits
and benefits
Changing personal
information
Responding to an
audit/examination
AFTER SUBMISSION
The error was discovered after the
respondent submitted the information
DURING SUBMISSION
Automatic screening highlighted the
error immediately
BEFORE SUBMISSION
The error was discovered while
the respondent was preparing a
tax return or form
Sample: Respondents who committed taxerrorSource: Accenture Taxpayer Survey 2017

WHERE ERRORS STRIKE
Misunderstandings and maths errors
are behind the most common errors
I made a reporting error because of misunderstanding tax laws
I made a mathematical or calculation error
I made a data entry or clerical error
I forgotto reportsomething (e.g. additional income from shares)
I forgotto sign or add an attachment
I submitted tax information that was inconsistent
I used incorrectinformation from third parties for tax purposes
Filing/amending tax
returns or forms
Responding to
audit/exam
46%
32%
29%
25%
25%
24%
23%
25%
38%
19%
28%
29%
26%
30%

ACCURATE AUTOMATION
Taxpayers think automatic validation
is the best way to reduce errors
Question: if your tax authority were to provide the
following resources and information,how important
would these be in helping you to reduce or eliminate
the errors that you have made? (Top 3 Ranks)
30%
14%
29%
8%
5%
7%
2%
54%
48%
46%
39%
38%
35%
15%
Top Choice Within Top 3
Automatic validation of your entries
Live online chat service
Short informational videos
A virtual digital assistant
Preemptive notificationof issues (e.g. legal changes)
Pre-filled forms using previous years’ data
Pre-filled forms using current third-party information
Respondents’ preference for automated checks and live assistance shows taxpayers want a more responsive, intelligent
and helpful revenue agency

Younger people make
more errors—we
need more supportive
tax services for less
experienced taxpayers.
“

ADAPTING TO AGE GROUPS
Those between 18 and 34 have high error rates
Sample: All respondents (n=6512)Source: Accenture Taxpayer Survey 2017
Have you made any taxpayer errors in the last 24 months while managing your taxes and interacting with your tax authority?
35%
53%
47%
32%
16%
Overall 18-24 years 25-34 years 35-54 years 55+ years
29%
50%
42%
25%
8%
Overall 18-24 years 25-34 years 35-54 years 55+ years
FILING/AMENDING TAX RETURNS OR
SUBMITTING OTHERFORMS
RESPONDING TO AN
AUDIT/EXAMINATION

BEHIND THE ERROR RATE
Unnecessary complexity and bad design
Revenue agencies are not responsible for tax legislation, but they are responsible for communicating its
effects. Most tax systems are complex and if revenue agencies fail to make it easy for taxpayers, errors will
remain a major burden.
Taxpayers need a system
that helps them along and
addresses the challenges
many report in dealing with
their tax affairs.
Disconnected services,
excessively complex processes
and a confusing mix of paper and
digital interactions all increase the
burden on taxpayers, leading to
lower accuracy.
The tax system can encourage
taxpayers to put off thinking
about their taxes until the last
minute, increasing the chance
of errors.

STOPPING THE CYCLE OF ERRORS
A system designed for the taxpayer
To address the cycle of
errors and improve the tax
experience, revenue
agencies need to redesign
their services and how they
interact with citizens.
The key will be to put the
customer at the heart of their
design approach as agencies
exploit new technologies.
For younger taxpayers in
particular, fitting tax into their
lives demands a digital tool
that is with them wherever
they are.
Millennials will use an
engaging, tailored,
integrated and easy digital
interface. Errors will decline as
the digital experience
becomes easier and more
personalised.
Redesign services
and taxpayer
interaction can
address the
continuous cycle of
errors and improve
the experience

It will take more than
digitalization alone to
relieve the burden of
taxpayer errors.
“

GETTING DIGITALIZATION RIGHT
A system designed for the taxpayer
Digital systems are not alone a solution to taxpayer errors. Electronic systems can have
numerous automated checks but still be overcomplicated and burdensome for taxpayers.
The way digital interactions are designed needs to built around the customer
they serve, anticipating their needs, level of knowledge and available information.
With a stronger service design approach…
Connecting with the revenue agency will become as simple and intuitive as possible,
making it easier to comply.
Compliance will improve with more accurate and on-time returns.
Employees will spend less time correcting errors and more time focusing on higher priority
and higher value issues.
Taxpayers will become more satisfied with the service and less burdened by
the tax system.

16Copyright © 2018 Accenture. All rights reserved.
THREE
PRINCIPLES
OF SERVICE
DESIGN
3
2
1USER CENTRIC
Putting the user at the heart of everything
you do fosters an empathetic understanding
of the problems to be solved and will create
services that delight users and gain adoption
CO-CREATION
Exploring and designing concepts together
will produce solutions that are business
viable as well as technically feasible
HOLISTIC
Building interdependent, interrelated experiences
that connect emotionally with people help propel
services that scale beyond the original idea.
Agencies can implement complete solutions
driving greater value to the agency faster.

ERROR-FIGHTING SERVICE DESIGN
The Four “Forms”
Work with platforms
and users to gain
understanding using
quantitative and
qualitative research
Identify the opportunities
to create value through
the art-of-the-possible
Design solutions
together that solve the
problems and shape
experiments
to learn from users
Expand, strengthen,
and enrich solutions
that create value
INFORM
Discover with
insight
FORMULATE
Describe with
impact
FREEFORM
Co-create
with agility
TRANSFORM
Scale with
excellence
Use Service Design to construct new and engaging ways to reduce taxpayer errors and foster voluntary compliance.

Make it easier for citizens
to avoid errors—better
service experience guides
taxpayers to accurate
compliance
“

CASE STUDY
The ATO’s “Reinvention Program”
The Australian Tax Office (ATO) has become significantly more user-driven in
recent years. The agency’s “Reinvention Program” focusses on creating better
services and experiences by engaging and co-designing with taxpayers directly.
This includes:
SURVEYS of taxpayer and staff satisfaction
SIMULATIONS to test thinking and products
ON-SITE VISITS to understand client experience
CO-DESIGN WORKSHOPS with different market segments
SANDBOX ENVIRONMENTS to test and gain feedback on services
Source: https://www.ato.gov.au/Media-centre/Speeches/Commissioner/Better-services-and-a-better-experience-for-Australians/

ABOUT THE ACCENTURE
TAXPAYER SURVEY
This report is based on data from the third edition of the Accenture Taxpayer Survey. The survey explored the experiences,
attitudes and expectations of citizens – from 12 countries – with respect to their national/federal tax authority.
SAMPLE SIZE: 6,512 in total (1,001 from the US;
circa 500 from each other country)
FIELDWORK DATE: March/April 2017
RESPONDENT PROFILE: To participate, respondents must have
interacted with their tax authority in the last 12 months and be over
18 years of age. They included part-time and full-time employees,
retirees, self-employed and business owners.
62% Part-time/full-time employee; files a tax return
12% Part-time/full-time employee; did not have to file a tax return
10% Self-employed/small business; files a tax return
3% Self-employed/small business; did not have to file a tax return
10% Retiree; files a tax return
3% Retiree; did not have to file a tax return
COUNTRIES:
LANGUAGES:
Respondents were surveyed in their local
languages (English was used in Singapore).
Australia
Denmark
France
Ireland
Japan
Netherlands
New Zealand
Norway
Singapore
Spain
UK
US

SAMPLE COMPOSITION
22
6,512 taxpayers aged 18+
Note: The study was conducted with a confidence level of 95%
GENDER
Count %
MEN 3280 50%
WOMEN 3232 50%
TOTAL 6512 100%
AGE
Count %
18-24 748 11%
25-34 1708 26%
35-44 1469 23%
45-54 1158 18%
> 55 1429 22%
TOTAL 6512 100%
COUNTRY
Count %
AUSTRALIA 500 8%
DENMARK 502 8%
FRANCE 500 8%
IRELAND 500 8%
JAPAN 500 8%
NETHERLANDS 502 8%
NEW ZEALAND 503 8%
NORWAY 500 8%
SINGAPORE 501 8%
SPAIN 503 8%
U.S. 1001 15%
UK 500 8%
TOTAL 6512 100%
Copyright © 2018 Accenture. All rights reserved.

CONTACT US
23Copyright © 2018 Accenture. All rights reserved.
DAVID REGAN
Global Managing Director
Accenture Revenue
MICHAEL KELLY
Digital Lead
Accenture Revenue
Accenture is a leading global professional services
company, providing a broad range of services and
solutions in strategy, consulting, digital, technology
and operations. Combining unmatched experience
and specialized skills across more than 40 industries
and all business functions—underpinned by the
world’s largest delivery network—Accenture works
at the intersection of business and technology to
help clients improve their performance and create
sustainable value for their stakeholders. With
approximately 442,000 people serving clients in
more than 120 countries, Accenture drives
innovation to improve the way the world works and
lives. Visit us at www.accenture.com.
ABOUT ACCENTURE

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