IBM to develop tax system for California

California's Franchise Tax Board has tapped IBM Corp. to develop a tax system that will help the state collect $30 million in revenue lost annually because of missing income tax returns.

The system will use IBM's business intelligence and data mining software to analyze tax returns stored in the FTB data warehouse and will cross check the information against historical and third-party data to locate residents who have not filed tax returns.

"This partnership with IBM will allow us to better go through the data and be more accurate in identifying tax non-filers. It will make us much more efficient," FTB spokesman Patrick Hill said.

The $29 million system should be fully operational by December 2001, and it will pay for itself in the first year with the additional revenue collected, Hill said.

But the state is bringing the $29 million system online in phases. The first major milestone occurs in December 2000, when the state will be able to identify non-filers. The full system also will enable the FTB to eliminate faulty data, including incorrect names, identification numbers and duplicates, and an automated case management feature will be used to mail notices to past non-filers.

The business intelligence solution includes an IBM RS/6000 SP server, DB2 Universal Database, an online analytic process server and applications from the company's electronic business offerings.