IRB Director Claudette J. Watson-Anderson to Testify on Tax Agency's Budget

Claudette J. Watson-Anderson, Director of the V.I. Bureau of Internal Revenue, along with her management team, will present testimony Friday before the 28th Legislature about the status, initiatives and projected 2011 budget of the territory’s tax collection agency.

The Bureau is responsible for the administration and enforcement of the territory’s tax laws. IRB collects corporate and individual income, gross receipts, trade and excise, production, highway user’s, hotel occupancy, fuel and other miscellaneous taxes.

In fiscal year 2009, the IRB collected $582 million in taxes for the Virgin Islands government. For 2010, as of June 30, $471 million has been collected.

This year, IRB has so far processed 26,634 tax refunds, most of them filed for the 2009 tax year. The Bureau’s free Taxpayer Assistance program helped Virgin Islanders complete 1,445 returns between February and April of 2010.

Watson-Anderson will outline to lawmakers the Bureau’s strategic goals for the coming year. Those include increased promotion of voluntary compliance with tax laws, the hiring of a taxpayer advocate to help resolve tax cases, continuing education in handling delinquent accounts, enhanced collection efforts by the Return and Audit branches, and an overall modernization of the Bureau’s filing system.

To meet those goals, and tackle several planned and ongoing initiatives, the IRB director will request the legislature approve a budget of $10,415,971 for the Bureau. Of that budget, more than $6 million funds 148 positions—96 on St. Thomas, 49 on St. Croix and 3 on St. John.

This year, IRB successfully implemented initiatives designed to decrease the tax gap and enhance collection efforts on delinquent receivables.

Those initiatives included using a $579,766 Department Of Interior grant to fund scanning all filed documents in the Bureau’s Tax Processing System. A suitable contractor has been identified, and will start the work in the coming months. IRB has also contracted a former IRS agent who will assist the local tax bureau in designing and implementing an infrastructure that supports data consistency, improves the identification of underreporting, and installs improved enforcement procedures to ensure taxes are adequately collected.

IRB has launched a matching program to detect under-reporters and non-filers—the program is still in development, with files being exchanged to facilitate the first phase of the process. The Bureau also improved its annual tax update to include a section on training for ethics and professional conduct and formed a labor management committee to address issues such as safety, communication and efficiency in the workplace that can be resolved prior to the grievance process. 

An IRS assessment the Bureau requested of its audit staff was completed in June 2009, with the finding that local auditors should receive more advanced training to facilitate them in performing complicated tax examinations and reviews. That recommendation is being implemented.

Watson-Anderson will update legislators on the status of IRB managed buildings. The Bureau will be relocating its offices to East End Plaza this November. Architectural and engineering designs for an expansion of the Bureau’s St. Croix office are also nearly complete.

IRB recently opened its first satellite cash and collection deposits branch in Sugar Estate, St. Thomas, with another satellite office in Nisky Center to be completed shortly. 

The Internal Revenue Bureau is also working with the Department of Licensing and Consumer Affairs to revise the tax clearance process, allowing local businesses to obtain or renew licenses more expeditiously.

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