Wisconsin Dept. of Wisconsin Dept. of Revenue Revenue

Data Warehouses/Data Data Warehouses/Data MiningMining

Janna BaganzJanna BaganzAmy BomkampAmy BomkampAugust 22, 2006August 22, 2006

• Project began during Project began during 1999 and available July 1999 and available July 20002000

• STAX available for STAX available for individualsindividuals

• Maintenance efforts Maintenance efforts difficultdifficult

Corporate Data Corporate Data WarehouseWarehouse

Corporate Data Corporate Data WarehouseWarehouse

Contractor Hired to BuildContractor Hired to Build

Corporate Data Corporate Data WarehouseWarehouse

Corporate Data Corporate Data WarehouseWarehouse

• WI corporate franchise/income WI corporate franchise/income tax return informationtax return information

• WI sales/use tax return WI sales/use tax return informationinformation

• Sales/use tax registration Sales/use tax registration informationinformation

• Audit history and resultsAudit history and results

Information Included in Data Information Included in Data WarehouseWarehouse

Corporate Data Corporate Data WarehouseWarehouse

Corporate Data Corporate Data WarehouseWarehouse

State franchise/income taxes are not State franchise/income taxes are not deductible for WI tax purposesdeductible for WI tax purposes

• Addition modification is required to Addition modification is required to go from federal taxable income to WI go from federal taxable income to WI taxable incometaxable income

• Addition modification previously Addition modification previously computed less than WI net computed less than WI net franchise/income tax paidfranchise/income tax paid

• Corp Office Audit ProjectCorp Office Audit Project

• Over $27M of tax assessedOver $27M of tax assessed

Successful ProjectsSuccessful Projects

Corporate Data Corporate Data WarehouseWarehouse

Corporate Data Corporate Data WarehouseWarehouse

Dept. of Workforce Development Dept. of Workforce Development (DWD) Project(DWD) Project

• Corporations filing WI Corporations filing WI unemployment tax returns unemployment tax returns with DWD and not filing WI with DWD and not filing WI franchise/income tax returnsfranchise/income tax returns

• Over $13M of tax assessed + Over $13M of tax assessed + ongoing complianceongoing compliance

Successful Projects Successful Projects (continued)(continued)

Corporate Data Corporate Data WarehouseWarehouse

Corporate Data Corporate Data WarehouseWarehouse

Corporations with more than $1M of Corporations with more than $1M of gross receipts and little or no use gross receipts and little or no use tax reported for specific counties tax reported for specific counties where audits could be assignedwhere audits could be assigned

• Used for field audit selection for Used for field audit selection for certain district or branch officescertain district or branch offices

• Over $10M of tax assessedOver $10M of tax assessed

Successful Projects Successful Projects (continued)(continued)

Corporate Data Corporate Data WarehouseWarehouse

Corporate Data Corporate Data WarehouseWarehouse

Large corporations located in Large corporations located in Minnesota with more than $10M of Minnesota with more than $10M of gross receiptsgross receipts

• Need was for audits for our MN Need was for audits for our MN officeoffice

• Large Case Field Audit ProjectLarge Case Field Audit Project

• Further refinement was neededFurther refinement was needed

• Almost $8M of tax assessedAlmost $8M of tax assessed

Successful Projects Successful Projects (continued)(continued)

Corporate Data Corporate Data WarehouseWarehouse

Corporate Data Corporate Data WarehouseWarehouse

Corporations with large gross receipts Corporations with large gross receipts reporting little or no use taxreporting little or no use tax

• Discovery projectDiscovery project

• Letter sent to taxpayer with Letter sent to taxpayer with worksheet to compute additional worksheet to compute additional use tax dueuse tax due

• Over $2M of tax assessedOver $2M of tax assessed

• Didn’t close years for field auditDidn’t close years for field audit

Successful ProjectsSuccessful Projects (continued)(continued)

Individual Data Individual Data WarehouseWarehouse

Individual Data Individual Data WarehouseWarehouse

Build Data Warehouse In-HouseBuild Data Warehouse In-House

• Integrated team across IT and Business Integrated team across IT and Business UnitsUnits

• Business users control what data to load Business users control what data to load and surface from the data warehouse for and surface from the data warehouse for reporting reporting

• Phased approach to provide value along Phased approach to provide value along the way the way

• Keeps technical and business knowledge Keeps technical and business knowledge in-house. in-house.

• Internal team researched tools and Internal team researched tools and selected lowest cost of ownership with selected lowest cost of ownership with robust ETL and data quality capabilities. robust ETL and data quality capabilities. Chose SAS platform.Chose SAS platform.

Individual Data Individual Data WarehouseWarehouse

Individual Data Individual Data WarehouseWarehouse

• Phase 1 - included 3 sources (WI Phase 1 - included 3 sources (WI tax returns, IRS individual tax tax returns, IRS individual tax returns, and electronically filed W-2 returns, and electronically filed W-2 forms)forms)

Users received five hand-coded Users received five hand-coded reports for audit identification and reports for audit identification and two look-up reportstwo look-up reports

• Phase 2 – IRS informational returnsPhase 2 – IRS informational returns

Users received end-user query Users received end-user query capability and portal accesscapability and portal access

Build Data Warehouse In-House Build Data Warehouse In-House (continued)(continued)

Individual Data Individual Data WarehouseWarehouse

• Phase 3 – Dept of Phase 3 – Dept of Transportation informationTransportation information

Vehicle title, drivers Vehicle title, drivers license and registration license and registration informationinformation

Additional end-user Additional end-user query capabilityquery capability

• Phase 4 – Integration of Phase 4 – Integration of Corporate and Individual Corporate and Individual Data WarehousesData Warehouses

Build Data Warehouse In-HouseBuild Data Warehouse In-House (continued)(continued)

Individual Data Individual Data WarehouseWarehouse

Individual Data Individual Data WarehouseWarehouse

DW Steering Teamdeterm ines Data Source

B usiness Requirem entsM eetings

(A udit, Com pliance, & R& P)

Business Requirem entsDocum ent

(Deliverables Determ ined)

DW Team Begins DesignProcess

Steering Team votes onphase Deliverables

Question

s back

to use

r gro

ups

DW Build Process Begins

Build / M atchUser Data

MatchTesting

BuildContinue

User DataTesting

R aw D ataAccepted /

Report Build

User ReportTesting

R eport andD ata A ccepted

by U sers

Steering TeamA pproves Phase

Com pletion

DW Team m oves phasedata and reports into

ProductionUser Train ing and M entoring

Iterative ApproachIterative Approach

Individual Data Individual Data WarehouseWarehouse

Individual Data Individual Data WarehouseWarehouse

• Matching individuals and entities Matching individuals and entities allowing reports across data allowing reports across data sourcessources

• Summarizing various data to the Summarizing various data to the level of tax return information for level of tax return information for reporting purposesreporting purposes

• Identifies and tracks relationships Identifies and tracks relationships embedded in existing dataembedded in existing data

• Provides ability to track non-filer Provides ability to track non-filer activityactivity

Advantages of the Individual Data Advantages of the Individual Data WarehouseWarehouse

Individual Data Individual Data WarehouseWarehouse

Individual Data Individual Data WarehouseWarehouse

• Continually modifying based on Continually modifying based on user inputuser input

• More useful with each additional More useful with each additional data source availabledata source available

• Useful for many bureaus – Audit, Useful for many bureaus – Audit, Compliance, Research & Policy, Compliance, Research & Policy, etc.etc.

• Reports identifying under-Reports identifying under-reportersreporters

Advantages of the Individual Data Advantages of the Individual Data Warehouse Warehouse (continued)(continued)

Individual Data Individual Data WarehouseWarehouse

Individual Data Individual Data WarehouseWarehouse

• Asset report – all information in Asset report – all information in one locationone location

• Address reportAddress report

• End-user querying ability for audit End-user querying ability for audit selectionselection

• Write-back capabilityWrite-back capability

Advantages of the Individual Data Advantages of the Individual Data Warehouse Warehouse (continued)(continued)

Data Warehouse PortalData Warehouse Portal

Asset ReportAsset Report

Asset Report Asset Report (continued)(continued)

Asset Report Asset Report (continued)(continued)

Asset Report Asset Report (continued)(continued)

End-UserEnd-User Query Query CapabilityCapability

Data MiningData MiningData MiningData Mining• In addition to purchasing the SAS In addition to purchasing the SAS

tools, we also purchased a Proof tools, we also purchased a Proof of Concept for data miningof Concept for data mining

• SAS Advanced Analytics Team SAS Advanced Analytics Team performed a similar project for performed a similar project for the IRS on individuals with gross the IRS on individuals with gross receipts greater than $250,000 receipts greater than $250,000

• Submitted data to SAS from WI Submitted data to SAS from WI tax return and federal tax return tax return and federal tax return data on individuals from 2000-data on individuals from 2000-2004, as well as historical audit 2004, as well as historical audit informationinformation

Data MiningData MiningData MiningData Mining

• Information sent to SAS had Information sent to SAS had personal information removed personal information removed and was assigned a random and was assigned a random identifier for matching purposesidentifier for matching purposes

• We met with them multiple We met with them multiple times regarding WI tax specific times regarding WI tax specific informationinformation

• A list of 5,000 taxpayers with A list of 5,000 taxpayers with various score ranges was various score ranges was provided for testing purposes to provided for testing purposes to help SAS refine the modelshelp SAS refine the models

Data MiningData MiningData MiningData Mining

• Fourteen auditors completed Fourteen auditors completed testing of initial list on July 31, testing of initial list on July 31, 20062006

• A final audit list will be A final audit list will be provided by the end of provided by the end of September 2006, which September 2006, which includes the following two includes the following two scores for each taxpayer for scores for each taxpayer for each year:each year:

Under-reporter scoreUnder-reporter score

Monetary indicator scoreMonetary indicator score

SummarySummary

• Corporate tax data warehouse Corporate tax data warehouse efforts have been successfulefforts have been successful

• Individual tax data warehouse Individual tax data warehouse infrastructure is in place and infrastructure is in place and end-users are impressed with end-users are impressed with query and reporting query and reporting capabilitiescapabilities

• Anticipating positive results Anticipating positive results from data mining effortsfrom data mining efforts

Questions?Questions?