Case Study

California Franchise Tax Board: California generates $2 billion for citizen services

  • 960,000 tax returns processed per day at peak time

  • 24,000 tax returns processed in an hour

  • Four million tax returns in one week

"2016 was our best tax season. Our improvements, including using Pega, helped us process more than 16 million tax returns in less than four months. The last week alone accounted for four million records without a single issue or service request."

The Business Issue

With personal income tax supplying the majority of the state’s revenue for citizen services, California Franchise Tax Board (CA FTB) needed to close a tax gap between what citizens owed and what they voluntarily paid in their returns. Approximately 20% of inaccurate tax returns are a result of taxpayers failing to pay taxes, using incorrect tax forms and other exceptions.

The Solution

To accomplish these goals, CA FTB chose Pega to accurately validate the state’s tax returns. The Pega application is part of the Enterprise Data to Revenue (EDR) Project initiative, addressing enterprise operations and system modernization.

Pega was first used to automate paper correspondence processing, and then as the platform used to process all 16 million personal income tax returns for the 2016 tax season, handling as high as 960,000 returns per day.

The Results

With the new capabilities, tax returns are analyzed and validated automatically, reducing processing costs and improving employee productivity. Nearly eliminating inefficient paper-based processes, EDR will automate the processing of approximately one million digital and paper-based tax returns.

As a result of improved processes and automation, EDR has generated more than $2 billion in additional state revenue.

Related Resources

  • Learn how governments around the world are leading the way to build for change.

  • With Pega for Government, organizations can seamlessly engage with constituents over multiple channels.

  • The Government Empowered 2016 event brought together government leaders and industry experts with the goal to improve government service while reducing costs through modernization.

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  • Industry: Government
  • Product Area: Platform
  • Challenge: Customer Service