Adam Krupp

Indiana Revenue Commissioner Adam Krupp

INDIANAPOLIS — The Indiana revenue commissioner is certain the decades-old technology and processing errors that last week resulted in a belated distribution of $21.6 million in tax collections to local governments will not be repeated in the future.

“We're confident that issues like that are a thing of the past," Revenue Commissioner Adam Krupp said. "We've done an end-to-end review, we've taken a look at our system, these are legacy issues."

Krupp explained that a barcode scanning problem was responsible for most of the revenue held back from local governments.

He said the processing system occasionally did not recognize a taxpayer's county of residence on their return and their tax payments were put into a holding account, instead of the designated county account.

"We've identified where the breakdown is in our scanning equipment," Krupp said. "We've enhanced our software. We've put in indicators and flags to let us know any time that issue happens, as opposed to it being merely behind the scenes."

A second reason for Krupp's optimism that similar problems will not reoccur is that next year the Indiana Department of Revenue will begin replacing all of its technological infrastructure — some of which dates back nearly a quarter-century and doesn't always work well together — with a single, integrated tax system from FAST Enterprises that's used by 26 other states.

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"It will completely transform the way that Indiana Department of Revenue employees conduct their business on a daily basis," Krupp said. "It will also transform the way Hoosiers interact with us."

The new system's features include the ability for taxpayers to view past payments and tax returns, and to amend tax returns online. DOR also will be able to process all corporate returns electronically and to validate the revenue collected for and distributed to local governments.

"We have conducted extensive due diligence. We have visited other states to make sure the implementation of the FAST software has been successful," Krupp said.

"We have verified that the Indiana Department of Revenue is about to implement what is truly best in class for tax administration."

The new system is projected to cost a total of $77 million for implementation over four years, and support and maintenance for the next decade.

In 2017, Hoosier lawmakers approved spending $33 million on the project. Krupp anticipates the remaining funds will be included in the 2021-22 state budget.

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