Lawmakers consider $5 million to boost DOR audit technology amid data and contracting questions
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Summary
House File 3913 would give $5 million to the Department of Revenue for audit technology aimed at complex filers; labor and community witnesses supported the investment but urged in-house capacity and raised concerns about broad contracting authority and taxpayer data protections.
Chair Howard presented House File 3913, proposing $5 million for the Department of Revenue to bolster technology and auditing capacity focused on large corporations and complex partnerships. "This bill would provide $5,000,000 to the Department of Revenue to bolster their technology and ability for audits to guard against complicated financial tax fraud," Chair Howard said.
Witnesses from labor and community coalitions backed the investment. Eric Bernstein of We Make Minnesota called the proposal "a no brainer" for ensuring filers pay their fair share but cautioned that subdivision 2—allowing the commissioner to enter contracts—could permit outsourcing analytics rather than building in-house capacity. "We do feel that an important part of this investment would be to build in house auditing capacity," Bernstein said.
Tanner Fritzinger of the Minnesota Association of Professional Employees reiterated support for stronger auditing tools while urging emphasis on state workers and not outsourcing core analytic functions.
Department of Revenue legislative director Joanna Baers answered members' questions on data security and contracting practices, saying data protection is the department's top priority and describing existing software contracts and in-house testing practices. Members pressed on whether the language would allow private contractors to perform investigative work and urged continued attention to data privacy and cross-agency systems integration.
Chair Howard renewed his motion and the committee laid HF3913 over for possible inclusion in the 2026 tax bill.