Case Study Irs and Datawarehousing

Interactive Session Organizations The Internal R so farue Service Uncovers Tax Fraud with a Data Warehouse show window Study Questions 1. Why was it so difficult for the IRS to analyze the taxpayer information it had collected? Initi completelyy, IRS info were stored in legacy systems designed to process tax return forms expeditiously and organized in many different formats, including hierarchical mainframe databases, Oracle relational databases, and non-database prone files.The data in the hoaryer style hierarchical databases and flat files were nearly impossible to query and analyze and could not easily be combined with the relational data. 2. What kind of challenges did the IRS encounter when implementing its CDW? What management, organization, and technology issues had to be addressed? The challenges the IRS encountered when it utilise its CDW include Management Convincing the organization to undergo a sweeping upgrade like a data warehouse implementation was not easy, sinc e political relation agencies are normally risk-adverse and resist changes.Data warehouses train extensive effort to keep up-to-date. Organization The structure of data wasnt consistent because of tax law changes by means of the years. This made integration of the data a complicated process. The sheer amount of data that the CDW was slated to manage was far more than anything the IRS had previously handled. Data warehouses tend to require extensive amounts of money to keep up-to-date. Technology The CDW has grown in capacity from three terabytes at its creation in the late 1990s to approximately one hundred fifty terabytes of data.The most important feature of the data warehouse was that it be sufficiently large to accommodate multiple terabytes of data, but also accessible enough to sanction queries of its data using many different tools. The components that the IRS selected allowed CDW to do that. Conversion of the legacy data to the new system was not a uniform process. 3. H ow did the CDW improve determination making and operations at the IRS? Are there benefits to taxpayers? The CDW enables highly flexible queries against one of the largest databases in the world.IRS researchers can now search and analyze hundreds of millions or even billions of records at one time using a centralized source of accurate and consistent data instead of having to reconcile information from multiple contrary sources. The CDW allows the agency to recoup many billions of dollars in tax revenue that was lost under the old system. In 2006 the IRS collected $59. 2 billion in excess revenue via 1. 4 million audits of taxpayers questioned for underreporting taxes. Using the data warehouse, analysts are able to determine patterns in groups of people most likely to cheat on their taxes.The data warehouse reduced the time it takes to trace mistakes in claims and analyze data from six to eight months to only a few hours. The CDW is more secure than the old legacy system storage ta pes, thereby better protecting taxpayer data. 4. Do you think data warehouses could be useful in other areas of the federal vault of heaven? Which ones? Why or why not? Other federal agencies that might find data warehouses useful include Department of Defense maintain all personnel data from all four branches of the military including active duty, Guard, Reserve, and retired people.During times of war or national emergencies the data warehouse could supply information on people most qualified and available to respond to the emergency. All kinds of information and analyses could be performed if the data were consistent and complete. Federal Trade Commission could combine data on consumer-related activities into one data warehouse that would be available to all branches of government and private organizations. Data could help analyze economic situations and factors so that businesses and governments could pick out faster and better decisions.