SIMPLIFIED SCREENING FOR PREDICTING ERRORS IN TAX RETURNS

• US 20160148321A1
• Filed: 11/20/2014
• Published: 05/26/2016
• Est. Priority Date: 11/20/2014
• Status: Active Application

• Current Assignee: HRB Innovations Incorporated (H&R Block, Inc.)
• Original Assignee: HRB Innovations Incorporated (H&R Block, Inc.)
• Inventors: Cox, Randy, Ciaramitaro, Mark
• Application Number:
  US14/549,276
• Publication Number:
  US 20160148321A1
• Time in Patent Office: Days
• US Class Current: 1/1
• CPC Class Codes: G06Q 40/123 Tax preparation or submission

Abstract

Embodiments of the invention generally relate to predicting the likelihood of an error in a previously filed tax return. In particular, a set of screening questions is presented to a user that correlate to set of risk factors for an erroneous return. Based on the responses to the screening questions, a likelihood of error and an expected magnitude of error are calculated. Based on the likelihood of error and the expected magnitude of error, an error score and a recommendation of whether to re-prepare and refile an amended tax return is presented.

Claims

1. A non-transitory computer readable storage medium having a computer program stored thereon for providing an error score for a taxpayer'"'"'s previously filed tax return, wherein the computer program instructs at least one processing element to perform the steps of:

generating a questionnaire predictive of at least one error generally associated with tax returns filed with a government taxing authority;

presenting, to a user, the questionnaire for input by the user of at least one response indicative of a tax history of the taxpayer;

receiving an input, from the user, of at least one response;

providing, to a prediction engine, the at least one response received from the user; and

receiving, from the prediction engine, an error score for the taxpayer'"'"'s previously filed tax return based on the at least one response received from the user.

2. The computer readable storage medium of claim 1, wherein the user is the taxpayer or a tax professional acting on behalf of the taxpayer.

3. The computer readable storage medium of claim 1, wherein the error score is determined based on a likelihood of error associated with the taxpayer'"'"'s return.

4. The computer readable storage medium of claim 1, wherein the error score is determined based on an expected magnitude of error associated with the taxpayer'"'"'s tax return.

5. The computer readable storage medium of claim 1, wherein the computer program further instructs the at least one processing element to perform a step of advising the user on correction of the taxpayer'"'"'s tax return based on the determined error score associated with the taxpayer'"'"'s tax return.

6. The computer readable storage medium of claim 5, wherein the step of advising the user on correction of the taxpayer'"'"'s tax return comprises the substeps of:

determining that the error score is above a predetermined threshold indicating a likely tax liability on behalf of the taxpayer, such that the taxpayer owes the at least one government taxing authority a monetary amount; and

advising the taxpayer to have an amended tax return prepared and filed.

7. The computer readable storage medium of claim 5, wherein the step of advising the user on correction of the taxpayer'"'"'s tax return comprises the substeps of:

determining that the error score is above a predetermined threshold indicating a likely tax refund on behalf of the taxpayer, such that the taxpayer is owed by the at least one government taxing authority a monetary amount; and

advising the taxpayer to have an amended tax return prepared and filed.

8. The computer readable storage medium of claim 1, wherein the step of generating the questionnaire comprises the substeps of:

collecting tax-related information from a set of tax returns filed by a plurality of taxpayers;

applying multivariate analysis to the collected tax-related information to obtain a classifier and a set of indicators; and

generating a set of questions, each question corresponding to an indicator of the set of indicators.

9. The computer readable storage medium of claim 8, wherein the step of determining the error score comprises the substep of applying the classifier to the at least one response received from the user to determine a likelihood of error.

10. The computer readable storage medium of claim 1, wherein the step of generating a questionnaire comprises the substeps of:

determining if the tax return was prepared by either a tax professional or was self-prepared by the taxpayer;

generating a first set of questions corresponding to a first subset of the set of indicators if the tax return was prepared by a tax professional; and

generating a second set of questions corresponding to a second subset of the set of indicators if the tax return was self-prepared by the taxpayer.

11. The computer readable storage medium of claim 1,

wherein the previously filed tax return was for a tax year;

and

wherein the presented plurality of indicators includes at least one indicator directed to a change in at least one tax law or a new tax law that initially went into effect in the tax year.

12. The computer readable storage medium of claim 1, wherein the questionnaire includes questions relating to at least three of the set consisting of:

a household member of the taxpayer attending school;

a failure to claim all dependents living in the taxpayer'"'"'s household;

a growth of the taxpayer'"'"'s household;

a debt forgiven;

a large medical expense;

a household member of the taxpayer engaged in military service;

a source of foreign incoming requiring a payment of taxes in a foreign country;

a source of retirement income;

a member of the taxpayer'"'"'s household having an individual taxpayer identification number;

a self-employed member of the taxpayer'"'"'s household;

a source of rental property income;

a farm owned by a member of the taxpayer'"'"'s household;

a lump-sum social security payment; and

a letter received from the government taxing authority.

13. The computer readable storage medium of claim 1, wherein the questionnaire includes questions relating to at least one of the set consisting of:

a state-level renter'"'"'s tax credit claimed on the tax return;

a state-level property tax credit claimed on the tax return;

an unverified tax withholding;

an unclaimed home expense;

a vehicle purchase in combination with an itemized tax return;

a home purchase in combination with an itemized tax return;

a known state tax issue; and

a known local tax issue.

14. A system for providing an error score for a taxpayer'"'"'s previously filed tax return, comprising:

at least one data store storing a first set of tax-related data known to be associated with erroneous returns;

a prediction engine comprising;

a statistical analyzer, operable to receive data from the data store and generate a questionnaire, and

an error score calculator associated with the questionnaire;

at least one display operable to display the questionnaire and an output of the prediction engine;

an input device, operable to receive a user'"'"'s responses to the questionnaire and pass the responses to the error score calculator; and

wherein the error score calculator calculates an error score based on the user'"'"'s responses to the questionnaire.

15. The system of claim 14, wherein the error score calculator comprises a classifier and a magnitude estimator.

16. The system of claim 14, wherein the prediction engine further comprises a recommendation engine operable to receive an error score from the error score calculator and advise the user on preparing an amended tax return based on the error score.

17. The system of claim 14, wherein the at least one data store further stores a second set of tax-related data associated with returns not known to be erroneous.

18. A method of predicting an error in a previously filed tax return, comprising the steps of:

receiving tax-related data associated with a plurality of erroneous tax returns;

compiling, based on the tax-related data associated with the plurality of erroneous returns, a plurality of indicators indicating an increased likelihood of error in an associated tax return;

generating, by a prediction engine, a questionnaire based on at least a portion of the plurality of indicators and an error score calculator associated with the questionnaire;

presenting the questionnaire to a user;

receiving tax-related data from the user responsive to the questionnaire;

passing the tax-related received from the user data to the prediction engine;

receiving from the prediction engine an error score for a tax return associated with the tax-related data received from the user; and

presenting to the user a recommendation as to preparing an amended return based on the error score.

19. The method of claim 18, further comprising the step of receiving tax-related data associated with a plurality of returns not known to be erroneous, and wherein compiling the plurality of indicators is further based on the tax-related data associated with the plurality of returns not known to be erroneous.

20. The method of claim 19, wherein the indicators are compiled by applying multivariate analysis to the tax-related data associated with the plurality of erroneous returns and the tax-related data associated with the plurality of returns not known to be erroneous.