The Iowa Department of Revenue (IDR) is responsible for the financial management of the state tax system and compliance with the tax laws. Their mission is to collect all taxes due, but no more.

Essentially, the IDR operates under the philosophy that most non-compliance is an educational issue: taxpayers don't know they aren't complying because they don't understand the filing requirements.

Therefore, as a means to encourage voluntary compliance through taxpayer education and assistance, and at the same time to enhance revenue collection through office examinations and field audits, the Tax Gap Compliance Project was conceived and implemented.

The project is based on an enterprise data warehouse (EDW) running on Teradata. With the EDW, the IDR now has a single, integrated view of all internal data resources and the external data resources crucial to tax compliance available from other state agencies, the federal government and commercially available sources. Up-to-date information accessible to every group in the IDR ensures open and accurate intra-departmental communication and data sharing, so the IDR can operate effectively as one agency.

With the EDW, the department has improved its detection of non-compliance in all tax areas. Further, as the IDR works through its compliance and audit programs, it identifies tax rules and regulations which need to be clarified to make compliance easier for the taxpayer and preparer.

As the project matures, the IDR and Iowa state government will reap benefits beyond the revenue generation of the compliance initiatives. The ability to ask "what if" legislative questions, fiscal impact questions, to analyze data to understand the results of potential changes in the tax laws, opens up the possibility of making more educated improvements to the Iowa tax system.