Guest Worker Compliance: Components
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1 Guest Worker Compliance: A Model for Project Partnership Alan Felton, Assistant Secretary Tax Compliance Randy Barnes, Assistant Secretary Information Technology Barbara Bostian, MPM, PMP Enterprise Project Management Officer North Carolina Department of Revenue Components Implementing a Data Warehouse in 78 days Business Objective (s) IT Objective(s) Project Methodology Measures of Success 1
2 What is the business problem? Increased guest worker community Identifying areas of non-compliance Data quality issues Net Result: Better Tool = Increased Assessments and Higher Revenue Demographic Profile of Hispanic Immigrants A large segment of N.C. s non-compliant guest workers originate from: Guatemala Nicaragua Honduras Earn an average per annum salary of $32,000 Are employed in: Food processing plants Furniture and textile manufacturing facilities Construction industry Have been employed for several years Have an income tax liability 2
3 Guest Workers: Tax Compliance Issues o False name and Social Security Numbers o Minimum or no withholding on wages o Non-filers o 1099 income recipients o Counterfeit documents obtained (birth certificates, Social Security cards; other forms of identification) o Dependents and incorrect filing status Business: Project Purpose Use software tools to identify areas of non-compliance within the guest worker community Provide output for audit selection Implement an analytical approach Train personnel on new tools 3
4 IT: Project Purpose Building a Data Warehouse Assess systems for gaps and quality issues Identify, cleanse and load data from additional sources Implement a consolidated data repository IT: Building a Data Warehouse Software Hardware Data Vendor (SAS) Infrastructure Training Security requirements Support 4
5 Data Warehouse Product Description SAS Business Intelligence Tools Data Repository: Integration of three sources (ITAS, 1099 and NC-3) ITAS individual income records (5 million records) 1099 federal return data for individuals (1.6 m) NC3 return data from employers (4 m) Vendor partnership: Scope of Work Project Methodology Product Description Project Objectives Performance Measures Project Scope Out of Scope Deliverables Dependencies Constraints Milestone Schedule Approvals 5
6 Project Methodology: Project Objectives Create a system from which NC-3 wage data and 1099 non-employee compensation for guest workers can be analyzed in order to promote voluntary tax compliance. Determine the feasibility of utilizing the 1099 MISC and NC-3 data sources along with Individual Income schedule from ITAS data in a single consolidated data source Identify benefits derived from modeling data in a subject-oriented fashion and provide end-users direct access to query data and report functionality. Determine the suitability and applicability of using data warehouse and business intelligence tools with ITAS data. Critical Success Factor: Project Plan Agreement on purpose, scope, roles and responsibilities Decision making authority, including acceptance criteria at onset Clear project deliverables with milestone payments Focus: Teamwork 6
7 Critical Success Factor: Executive Sponsor(s) Leadership: Joint ownership Project manager is accountable for project success Clear roles and responsibilities Visibly support through actions Vendor partnership Critical Success Factor: Roles and Responsibilities Matrix Organization: Project resources are not dedicated Weekly project status meetings Clear assignments Resources allocated full-time for appropriate times (requirements, acceptance testing, production turnover) 7
8 Critical Success Factor: Project Schedule Start Date: 3/20/06 Production Date: 6/30/06 Planned Days: Actual Days: 80 days 78 days 2 days early! Critical Success Factor: Project Budget Budgeted Costs: $326,000 Actual Costs: $254,944 Percentage Actual vs. Budget 78% $71,056 less than planned! 8
9 Project Methodology: Measures of Success The selected NC-3, 1099 MISC and Individual Income tax data is available in one database. The users are able to directly access data and generate adhoc reports by creating queries to filter and sort the data. Ability to extract data in excel or text files from the application as per the selection criteria. Project Methodology: Measures of Success Print standard and ad-hoc reports on local printers. Conduct training classes for the business and technical users identified by DOR. Ability to download data from this application that can be imported into MS Access and Excel for additional processing. 9
10 Did we meet our goals? Data Warehouse is in Production Project exceeded time, budget and end-user expectations IT is able to identify capacity and infrastructure opportunities for future growth Net Result: Better Tool = Increased Assessments and Higher Revenue Lessons Learned and we learned more! (for the next project): Team members are assimilating results from the product of the project Support agreement with vendor for additional knowledge transfer (80 hours/2 months) Training passes for key users (18 months) Ultimate success will be dependent on knowledge transfer 10
11 Panel Q&A Thank you! We are happy to address any questions Alan Felton, Tax Compliance Randy Barnes, Information Technology Barbara Bostian, Enterprise Project Management 11
Presentation Outline
Guest Workers: : Outreach- education/ enforcement FTA Annual Meeting Little Rock, Arkansas June 4-7, 2006 Presentation Outline o Barriers to Compliance o Tax Compliance Issues Processing Audit o ITIN Statistics/Resource
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