Department of Revenue Tax and Water Revenue Bureaus

Department of Revenue Tax 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 Certification Mechanism

Department of Revenue Tax 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 Certification Participants

Department of Revenue Tax 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 Certification Next Steps

Department of Revenue Tax 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 Indebtedness

Department of Revenue Tax 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 Lots Mechanism

Department of Revenue Tax and Water Revenue Bureaus ‣ $2 million in assessments in FY10 and FY11 ‣ Switching focus to large clubs and concert venues Results Investigations into Parking Lots

Department of Revenue Tax and Water Revenue Bureaus Use External Data to Find Under Reporting ‣ Multiple External Data Sources ‣IRS ‣Commonwealth ‣Other City Departments ‣ Want to expand the use of outside

Department of Revenue Tax 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 Database (EOAD)

Department of Revenue Tax 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 Audits

Department of Revenue Tax 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 Plumbers