New visibility on a taxing problem - Teradataapps.teradata.com/tdmo/v08n01/pdf/AR5548.pdf · CLI;...
Transcript of New visibility on a taxing problem - Teradataapps.teradata.com/tdmo/v08n01/pdf/AR5548.pdf · CLI;...
axation presents a difficult challenge
for governments. Revenue departments
must collect all money due, enforcing tax laws
fairly and firmly, while accurately and dili-
gently identifying non-compliant taxpayers.
Yet these public agencies must also provide
professional constituent service, offering
individualized assistance to each customer.
The Missouri Department of Revenue
(DOR) recognized that its Division of
Taxation had room to improve on these
goals. In 2004, the DOR partnered with
Teradata to deploy enterprise data ware-
house (EDW) technology that matches
data from several outside sources to the
department’s internal data. These matches
help identify businesses and individuals
who are not properly registered, not filing
or not correctly reporting their tax lia-
bilities. The DOR’s new “compliance
data warehouse” also provides a complete
source of information that helps increase
revenue collection and improves service to
each customer.
In the first three years
of the program, the DOR
recovered nearly $21 million
of unpaid and under-
reported taxes from non-
compliant filers. “This is
actual money that the state
has received and can add
to the budget,” says Jim
Brentlinger, administrator
of the DOR and the execu-
tive owner of Missouri’s
compliance data warehouse.
“Without the Teradata ware-
house, we probably would
not have ever retrieved these
funds, since we were unaware
that the money was due to
the state.”
The agency also improved
the service it provides to com-
pliant and non-compliant
taxpayers alike. “We want
to teach taxpayers how to
prevent this mistake from
New visibilityon a taxing problemMissouri’s Department of Revenue reels in $21 million in delinquent paymentswith the promise of more to come. by Cheryl D. Krivda
CASE STUDY
T
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happening again and keep them from
becoming a non-compliance case,”
Brentlinger explains.
Balancing collections efficiencywith service qualityDOR operations include 118 discrete tax
systems, which cannot communicate or
share information. These systems process
various taxes, including those levied against
corporations and franchises, sales, employee
withholding and personal income.
Before the Teradata warehouse was
deployed, the agency could not easily ana-
lyze or assess data from the various systems.
Individuals could manually generate a small
number of reports, which staff members
used to compare a few items. However, cre-
ating these reports was time-consuming and
labor-intensive, leaving many delinquent
taxpayers undiscovered.
“Since these amounts were under-
reported or unreported, we literally
didn’t know what we were missing,” says
Brentlinger, a nine-year veteran of the
department. “Even so, from the businesses
we’ve audited and assessed, we know there
is more than $1 billion owed to the state
of Missouri. We can only imagine how
much more is out there.” The DOR uses
the data warehouse to turn what the
department can imagine into knowledge
of what revenues are owed.
Collecting delinquent revenues requires
a deft touch, though. “We are sometimes
viewed as the big bad department of rev-
enue, the agency that just wants the tax-
payer’s money,” says Brentlinger. “At the
same time, the taxpayer is also our cus-
tomer—whether that’s a corporation, a
small mom-and-pop store or an individual
citizen. They’re all customers of the state
because they all use the services that the
tax dollars provide. We need to collect the
money in a way that allows us to provide
good customer service.”
Choosing performanceand affordabilityTo enable cross-system information
exchange, the DOR decided to create an
EDW that would support data mining,
analysis and business intelligence (BI)
capabilities. The agency wanted to
centrally compile all of its data and use
that information in back-office systems
as well. Moreover, the system had to be
cost-effective to run and administer.
The DOR created an extensive list of
requirements but expected to compromise
to stay within budget. Upon reviewing the
Teradata proposal, however, the agency
realized it could meet all of its goals.
“We looked at the Teradata solution and
quickly realized it was the best option,”
Brentlinger says. The powerful technology,
excellent system performance, ability to
share data and overall affordability made
the Teradata solution an easy choice. Sys-
tem administration was a particular
bonus. Brentlinger contacted other states
that were customers of Teradata and
confirmed that system administration
could be handled easily by only one or
two database administrators.
Meeting the needsAlso in development is the DOR’s case
audit management system, an application
that will be used to automate the auditing
of taxpayer accounts. When the system
is complete, the audit department will
replace manual processes with electronic
data that can be fed into the data ware-
house. The data will be shared with legacy
back-office systems.
Additionally, the new system will feature
an interaction tool that will allow users from
different departments to communicate. “If
it’s a discovery lead, the discovery unit might
contact the taxpayer and leave notes about
the interaction,” explains Brentlinger. “The
audit department could review those notes
and better understand the steps that have
already been taken to encourage compliance.
This tool will allow everyone in the DOR to
have visibility into the history of the
interactions with any taxpayer.”
Integration on this scale is a huge
improvement for the agency. “In the past,
each case audit file was stored in a file
cabinet, inaccessible to any other depart-
ment,” he adds. “The Teradata solution will
deliver a single view of the taxpayer across
all departments.”
“The Teradata warehouse not only paid for itself,but it has provided us with a new budget line item ofrevenue that will come into the state coffers. It’s beenan exceptional value.”
—Jim Brentlinger, administrator, Missouri Department of Revenue
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Pursuing revenue andeducation opportunitiesAs the early results come in, the DOR is
impressed with the benefits being realized.
“The business value delivered by Teradata
has been exceptional,” says Brentlinger.
“We interact with the Teradata team daily,
and they’ve been wonderful to work with.
We’re collecting money that we didn’t
know we were missing, and we’re suc-
ceeding in our goals.”
In the last two weeks of March 2007
alone, the DOR collected more than $2.2
million in unpaid and under-reported taxes.
Considering the $21 million collected since
the program’s inception, the state’s newly
realized income potential is staggering.
“We’re very excited about this oppor-
tunity,” Brentlinger explains. “We can
use the Teradata solution not only to
bring everyone into one view, but also
to use our discovery programs to create
leads and find additional taxpayers that
owe us money.”
Once identified, delinquent taxpayers are
contacted and treated with care. Most non-
compliant customers simply are not aware
that they have filed their taxes improperly.
“We approach it saying, ‘We think you
made a mistake and you owe the state some
money,’ ” says Brentlinger. “It’s an oppor-
tunity for communication, not strictly a
debt collection effort.”
In the meantime, new data sources and
discovery areas await. “I am always asked
whether the pool of outstanding tax rev-
enues is drying up,” Brentlinger says. “It’s
quite the opposite. As the available leads
are handled, we launch another discovery
program and find more non-compliant
taxpayers and even more unpaid monies.”
Providing public valueIn the near future, the DOR will continue
adding data to the data warehouse from
additional sources—including the motor
vehicle department and the drivers license
bureau—that will make compliance
searches even more fruitful.
“By doing that, we’ll make the Teradata
warehouse an even more valuable resource
for generating that single view of the cus-
tomer,” says Brentlinger. “We’ll use the
system to share that information and
expand the solution far beyond what we are
doing today. With additional information
about a taxpayer, we’ll have actionable intel-
ligence that will help the DOR to move
forward confidently. We’ll be able to take
action knowing that we have all of the facts
we need to make us successful.”
Even at this early stage of the deploy-
ment, the solution has demonstrated
tremendous value. “As a department, we
must be good stewards of the taxpayer
dollar,” Brentlinger states. “The Teradata
warehouse not only paid for itself, but it has
provided us with a new budget line item of
revenue that will come into the state coffers.
It’s been an exceptional value.” T
Cheryl D. Krivda has written for more than 20
years about the intersection of high technology
and business practices for publications and
corporations around the world.
CASE STUDY
Behind the solution:Missouri Departmentof Revenue
T he current environment at the Missouri Department of Revenue (DOR) features a
Teradata warehouse and Teradata Taxation Solutions, which include software and
professional services, such as:
> Case Management Component, an integrated application that manages, tracks
and assists in resolution of all leads for tax compliance and revenue recovery that
the solution produces
> Teradata Warehouse Miner, used for ranking and scoring customer leads
> Revenue Opportunity Assessment, which identifies recoverable revenue by tax
type and produces accurate revenue recovery projections
> Tax Discovery, used in the discovery of leads on non-compliant filers
With these solutions, the agency can access and compile data from a variety of
sources, including state departments and the Internal Revenue Service. As a result, the
DOR can create a complete view of each taxpayer. The department also can use the
system to run discovery programs against the data, looking for non-compliant taxpayers
and other problems.
—C.D.K.
Delivering a new view of taxpayers
Database: Teradata Database V2R6.1.1
Server:Production systems:Single-node Teradata 4980 Server and aTeradata 540S ServerDevelopment system:Single-node Teradata 4480 Server
Users: 100 (20 concurrent)
Data model: Third Normal Form (3NF)
Operating system: Microsoft Windows2000 and NT
Storage: Total for all systems: 4.9TB
Teradata utilities: Teradata Tools andUtilities 8.1: FastExport, FastLoad,MultiLoad, Teradata Dynamic QueryManager, Teradata Manager; TeradataUtility Pack: ODBC Driver, JDBC Driver,OLE DB, MultiTool, Administrator, BETQ,CLI; Priority Scheduler; Teradata AnalystPack - Visual Explain and Statistics Wizard
Tools/applications: Teradata WarehouseMiner and products from Atanasoft,ColdFusion and Information Builders(WebFocus)
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