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Odele’s Brain: Automated Tax Blueprint Challenge

How to create Odele, an automated tax planning assistant software that centralizes all financial planning around tax savings and planning. Read Overview...
Overview

Death and Taxes

We all know the saying - "the only guarantees in life are death and taxes." Most households treat taxes as an annual annoyance met with little preparation and a lot of aggravation. After all, the tax code is roughly 74,000 pages these days - not exactly light reading. And while many tax software systems already exist to ease the pain of annual filing, are they really guiding your finances in a way that makes tax planning as natural as setting up a monthly budget? That's exactly what the Financial Gravity team is seeking to do with the Tax Operating System® Challenge: create a comprehensive tax planning application as part of a broader, holistic household finance system. The best part? Financial Gravity already has a database of ideal tax "scenarios" that maximize take-home income for an enormous spectrum of brackets and situations. The part that's missing? The automation that connects individuals and their personal situation to their most ideal scenario. They will proactively operate their lives so that they pay the lowest tax allowable, by using every part of the law available to them. What they’ll have is a Tax Operating System®.

 

The Target End User

The winning design will be an application optimized to lower personal taxes for business owners, entrepreneurs and high net worth families with multiple sources of income, some investments, and the ability to save for the future. Small businesses owners and those with even smaller "side businesses" (or other additional income) will get even more value, as the application will aid in pre-emptive decision making and business planning to help retain as much of their gross income as possible.

 

Going Beyond the Basics

Maybe you already know about the tax benefits of the earned-income tax credit, business expenses, and health care costs, and that's a good start, but far from the whole story. In truth, the vast majority of people are still not optimizing their financial decisions and business plans for the most favorable tax outcomes -- and it's costing them thousands of extras dollars every year. The biggest and brightest companies in the world have highly paid teams dedicated to saving money in taxes, isn't it time for the little guy to get some of the same relief?

That being said, current financial services, even ones designed for the wealthy, are inefficient and inconsistent, in part due to their full dependence on a team of disconnected individuals.  These experts must maintain an understanding and stay current on thousands of pages of tax codes and a spectrum of financial products that change regularly and vary depending on a number of variables. Unsurprisingly, the outcomes achieved by wealth management services are varied and not uniform.

Despite the number of tax planning and wealth management services out there, ones that enable people to plan in advance of tax time have not yet been automated.  This field is ripe for automation to increase consistency, provide support to the experts working in the field, and provide accessibility to business owners at all income levels.  An artificial-intelligence-enabled solution will eventually outperform the best advisors as it learns from analyzing a wider variety of configurations for each and every case it processes.


About the Sponsor

Financial Gravity is a financial service provider offering fully-integrated financial solutions, with a sole focus on increasing wealth and decreasing costs. Whether you’re a business owner or an individual investor,  they have some most comprehensive tax, business solutions, and wealth management techniques in the industry.

Unlike traditional financial services firms or consultancies, their unique approach combines both individualized planning and hands-on execution, and with the Tax Operating System® Challenge, these tried and true methods will be brought to the next level of efficacy.

 

Odele’s Brain: Automated Tax Blueprint Challenge

Imagine that Odele, an automated tax planning assistant, pops up on your internet window to guide you through considering options for reducing your tax payment.  You may have wondered if there is more you could do to reduce your taxes, but couldn’t figure out who would be a great tax and business strategist for someone at your income level who also stays securely within the law.  Or maybe you are considering two career options - one is job employment and another is a business.  It seems like apples and oranges.  Odele enables you to compare these two scenarios financially.

Somehow, Odele makes it really easy for you to provide your information -- whether you are highly digitally savvy or lack digital literacy; whether you prefer speaking, writing, or typing; whether you gravitate toward smart phone, netbook, or computer.  Maybe you forwarded your electronic tax file and talked with Odele via your smart phone.  Or perhaps Odele scanned your printed tax return and you input data on your computer.   She will find the easiest way for you to give her the information she needs to let you know your options for saving tax dollars. 

Odele anticipates what you will need to know to answer her questions and only asks for the information she needs.   Within minutes, she comes back with her first estimate of potential savings.  If she needs more information, she will ask a few more questions and then return again within minutes with an estimate.
You are wowed by how easy it is to work with Odele. But really, the magic is all behind the scenes -- in Odele’s “brain”.

 

Odele’s Brain

Odele has used all her knowledge about IRS and state tax codes, court cases, and tax rulings and all her wisdom about how to apply this knowledge, to consider all of your options.   What would your taxes be if you changed business structures (e.g.,S-Corp to C-Corp) and used all the strategies available to that particular tax structure?  Spun off a separate company?  Hired your spouse?  Or changed your retirement vehicles?  The variations and permutations are many, if not infinite. 

Calculating and comparing the tradeoffs for all of these options might hurt your brain even if you had access to all the knowledge.  But not Odele.  She loves this stuff and she loves figuring out ways to get to the best options faster and faster.  She is always up-to-date with tax changes and knows who needs to shift their tax strategy based on these changes. What if you have another child, add a business, add an employee, add or subtract anything? Odele has you covered. 

This challenge is all about designing Odele’s brain.  In software architecture speak, we are talking about the “model” in the MVC framework.

The proposed Solution, “Odele”, when implemented, will:

  • Present and compare taxes and income for a business owner for a variety of tax configurations, assumptions, and projections.
  • Calculate Lost Income by comparing taxes paid for a previous year with taxes that would have been paid under an optimal configuration
  • Recommend Optimal Tax-Planning Configuration for the upcoming year, based on the business owner’s goals, preferences, personal lifestyle and logistics of implementing different tools and services.
  • Learn and upgrade its algorithms based on each case it handles, new tax regulations, tax court cases, IRS rulings, etc.  It should also able to alert users who may be using a strategy that is no longer optimal.

The winning Solution will be accurate, fast, fully automated, and cost-efficient.  It will fully protect user’s private data, and ensure the security of Financial Gravity’s proprietary tax planning and other financial knowledge. The winning solution will also be flexible and “smart” to enable updates based on tax code changes and learning from prior data.

The winning Solution will also include ideas for Odele’s user interface - it’s interactions with the consumer, especially where these affect how Odele’s brain will work.  But the main focus of this challenge is on Odele’s brain.

Odele will disrupt the financial services industry by making the combination of proactive tax planning, wealth-building, risk management, business strategy, and financial planning strategies accessible and affordable to business owners at all wealth levels.

 

What You Can Do To Cause A Breakthrough

  • Read the complete challenge guidelines to see the rules and requirements for entry into the challenge.
  • “Accept Challenge” by clicking the orange button above to compete in the challenge.
  • Follow the challenge above to be notified of any status updates to the challenge.
  • Share this challenge on social media using the icons above. Show your friends, your family, or anyone you know who has a passion for discovery.
  • Start a conversation in our Forum to join the conversation, ask questions or connect with other innovators.
Guidelines

High net worth business owners often utilize a variety of financial services (tax planning, wealth management, risk management, business strategy, and financial planning) provided by a team of financial advisors, to minimize their taxes and further their wealth.  Although people-intensive, the cost of these services is just a fraction of the savings generated for high revenue businesses and/or high wealth individuals.  

Many lower revenue business owners and/or lower wealth individuals could also benefit from tax strategies allowed by the tax code.  However, the savings generated would not cover the cost of the same savvy teams that serve the wealthy.  Therefore tens of millions of people are paying higher taxes than necessary.

Current financial services, even for the wealthy, are inefficient and at times inconsistent, in part due to their full dependence on a team of individuals.  These experts must maintain an understanding and stay current on thousands of pages of tax codes and a spectrum of financial products, such as insurance, that all change regularly and vary depending on the specific financial details of the individual.  It is time-consuming to conduct financial outcomes calculations on each combination of strategies for one client and therefore, typically, only a handful of combinations will be assessed.  It is not surprising that the outcomes achieved by wealth management services is inconsistent.

Despite the prevalence of many accounting and tax preparation systems, tax planning and wealth management services that enable people to plan in advance of tax time have not been automated.  Financial Gravity has developed the Fractional Family Office® along with the Tsx Blueprint®, and the Tax Operating System®, which seeks to match business owners with over 130 optimal tax scenarios to maximize performance.  However, this process is manual and not as efficient as it could be. 

The advance tax planning field is ripe for automation to increase consistency, provide support to the experts working in the field, and provide accessibility to business owners at all income levels.  An artificial-intelligence-enabled Solution will eventually outperform the best advisors as it learns from analyzing a wider variety of configurations for each and every case it processes. 

 

How the Solutions will be used

Once the winning Solutions have been selected, Financial Gravity will look to collaborate with a technology development team to implement Odele in phases (Prototype, GoToMarket, ScaleInMarket) using Financial Gravity’s proprietary tax knowledge.  The technology development team will design Odele using the best compatible ideas contained in the winning Solutions. 

Financial Gravity anticipates that some submitters will be invited to join this founding technology development team either full-time, part-time or in an advisory role, although this is not a requirement for submitting a proposal.

Financial Gravity expects to initially use the Solution in-house to support its financial advisors in their work and ensure that the implemented Odele system is at least as accurate as the top advisors.  Ultimately, Financial Gravity is looking to test and then fully roll out an Odele system for the public. 

In the next 5 to 10 years, the Solution could serve a large proportion of the millions of small businesses in the U.S. with revenues above $80K.  It is likely that user volume will be much higher during tax season and therefore the solution should anticipate spikes in usage.  Ultimately, the Solution could be utilized for other countries’ tax rules and regulations.

In addition to the stated cash prize pool, Financial Gravity intends to offer employment, contract work, and partnership opportunities which may include equity, to jointly create this new tax planning tool and other related products.

 

Prize

Financial Gravity will award a total prize pool of up to $125,000.  This prize may be split by up to 5 winners.  The minimum prize is expected to be $20,000.

 

Intellectual Property

All existing intellectual property rights, if any, in the idea, concept, or activities included in the Submission will remain with the Innovator.  Innovator understands, recognizes and accepts that Challenge Sponsor has access to, may create or has created materials and ideas which may be similar or identical to the Submission in concept, theme, idea, format or other respects.  It is expected that Financial Gravity will invite competitors in this challenge to join them in utilizing their proprietary data to create a new and potentially jointly owned proprietary tool.

 

How do I win?

To be eligible for an award, your proposal must, at minimum:

  • Satisfy the Judging Scorecard requirements
  • Thoughtfully address the Submission Form questions
  • Be scored higher than your competitors!

A prototype is not expected; however, if in designing your concept, you create a prototype or have a similar case that can demonstrate what your concept can achieve, please submit.

 

Judging Scorecard

Minimum Requirements:

  • Protects privacy and security- Solution must maximize the protection of user’s privacy and data.
  • Automates the entire process - Solution should eliminate the need for human interaction with the consumer.

Section

Description

Overall Weight

Accuracy

Solution must provide accurate outcomes and identify optimal outcome based on information provided. 

30

Innovation

The Solution demonstrates an innovative use and combination of existing or newly designed technologies, strategies and features

20

Speed

Solution should analyze and provide outcomes for relevant options and identify optimal outcome in 2 minutes, not including interaction time with the user

10

Cost-Effective

The Solution should minimize cost of processing one user’s inputs, while achieving accuracy and speed.

10

Ease of updating

Solution must be able to easily integrate new tax rules and new categories and formats of rules

10

 

Flexibility

The Solution easily allows for addition of new, related functionality and/or integration with other financial software.

10

Soundness of Implementation Plan

Implementation plan is feasible, thorough, and well-designed.

10

 

Data Provided to Competitors

Your submission will be judged primarily on Odele’s “brain” - its ability to process the information obtained from the user during their initial request and then in response to further information that Odele’s brain requires to accurately calculate options that are relevant for the user.  Your ideas on a user interface to easily obtain this information from a variety of types of users will also be considered.

There is a wide variety of data that could be useful in determining the best strategies for each user but not all of the data items are relevant to each user’s situation.  Financial Gravity aims to provide a great user experience by having Odely gather multiple data items through one user action (eg. providing past tax return forms) and asking only a few other questions that enable Odele to determine what is relevant for the user and what is not.   Odele will ask for additional information if needed.

This information Odele needs may come from:

  • Tax return forms (1040, Schedule C, 1120S, 1120, 1065)
  • Retirement account information: do they have retirement accounts, what type (eg. IRA, 401K) , and source (eg. user or spouse’s employment, business, personal) Business info
  • Businesses: company paid benefits, ownership percentages
  • Personal expenses and family/dependent data
  • Personal goals and preferences

You can assume that the Solution, when implemented, will have:

  • Full set of federal tax rules (all tax calculation software applications, such as TurboTax, have these to calculate taxes owed)
  • Full set of tax strategies (innovative, legal ways to reduce taxes owed)
  • At least 300 use cases initially (data from user, tax strategies used, and final tax payment)
  • 10 new use cases per week when Odele is used in-house by financial planning staff

For the purposes of designing Odele’s Brain during this Challenge, Financial Gravity has provided:

  • Background about complex tax law strategies as they relate to business owners
  • Details about how tax law can change 
  • 2 of use cases with user data, data and decision point examples, and expected outcomes

You may also choose to use other data and information not listed above to optimize your Solution.

 

Rules

Participation Eligibility:

The challenge is open to all adult individuals, organizations, private teams, public teams, and collegiate teams. Teams may originate from any country. Submissions must be made in English. All challenge-related communication will be in English.

No specific qualifications or expertise in the fields of financial planning, wealth management, business strategy, risk management, tax planning, artificial intelligence, machine learning, or other related fields is required. Prize organizers encourage outside individuals and non-expert teams to compete and propose new solutions.

To be eligible to compete, you must comply with all the terms of the challenge as defined in the Challenge-Specific Agreement

 

Registration and Submissions:

Submissions must be made online (only), via upload to the HeroX.com website, on or before 5pm EDT, on October 19, 2017. All uploads must be in PDF format. No late submissions will be accepted.

 

Intellectual Property Rights:

As detailed in the Challenge-Specific Agreement – All existing intellectual property rights, if any, in the idea, concept, or activities included in the Submission will remain with the Innovator.  Innovator understands, recognizes and accepts that Challenge Sponsor has access to, may create or has created materials and ideas which may be similar or identical to the Submission in concept, theme, idea, format or other respects.

 

Selection of Winners:

Based on the winning criteria, prizes will be awarded per the Judging Criteria section. In the case of a tie, the winner(s) will be selected based on the highest votes from the Judges.

 

Judging Panel:

The determination of the winners will be made by the sole determination of Financial Gravity. 

 

Additional Information

  • By participating in the challenge, each competitor agrees to submit only their original idea. Any indication of "copying" amongst competitors is grounds for disqualification.
  • All applications will go through a process of due diligence; any application found to be misrepresentative, plagiarized, or sharing an idea that is not their own will be automatically disqualified.
  • All ineligible applicants will be automatically removed from the competition with no recourse or reimbursement.
  • No purchase or payment of any kind is necessary to enter or win the competition.
  • Void wherever restricted or prohibited by law.
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