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

PAGE 1 | Teradata Magazine | March 2008 | ©2008 Teradata Corporation | AR-5548

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

PAGE 2 | Teradata Magazine | March 2008 | ©2008 Teradata Corporation | AR-5548

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)

PAGE 3 | Teradata Magazine | March 2008 | ©2008 Teradata Corporation | AR-5548