Holly Donnelly
MPP ’96
Director of Strategy and Business Solutions at the Internal Revenue Service
Years in government: 26
Harnessing the power of big data: I often joke about my work being taxing but that it keeps my interest (haha!). Specifically, I think about how we can harness the power of big data to collect taxes more efficiently.
We recently built a recommender system that uses a covariance matrix to compare all pairs of lines on a 1040 tax form. This allows us to find emerging noncompliance immediately in each new filing season. Using a randomized controlled trial to test the algorithm, we found it was more uniform and consistent than humans in indicating which lines to audit on each pre- selected return. This saves 14 full-time employees per year and an estimated $26 million because auditors are spending time auditing rather than classifying returns.
Ultimately, by improving enforcement and tax collection efficiency, we ensure fairness in the tax system, benefiting all taxpayers.
Reconciling values: I am unusual in that I have worked in three different agencies, and I ended up coming back to the first one. The reason why I’ve done that is because I want to be aligned with the goals of a leader I can believe in. At the IRS, I work for a career official. I was willing to move when my goals no longer aligned.
A serious need for data skills: There is just an insatiable demand in government for people who can work with and harness data. We have a serious need for skills like those you get from places like the Ford School. Being data-driven is absolutely crucial, and that goes hand in hand with being able to write memos and communicate effectively with stakeholders. We’re actively looking for people who can interpret data, use it to craft compelling narratives, and make decisions based on solid evidence.
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