Nebraska Department of Revenue
Report of the Results of the
Tax Amnesty Program

In accordance with the filing and reporting requirements outlined in LB 1017 passed by the 2004 Legislature, we herewith submit the report of the results of the Tax Amnesty Program.

1. In accordance with the statute, the proceeds in the Department of Revenue Enforcement Fund have been used to hire the following positions in 2006:

• Two Auditors - These auditors plan, coordinate, and conduct audit examinations of taxpayer records for several different tax categories. The work to ensure that all taxpayers are complying with Nebraska tax laws.

• One Revenue Conferee Lead - This person manages the Department's data warehouse project. The duties of this position include coordinating project activity between service areas of the Department, maintaining databases in the data warehouse, identifying and developing tax compliance leads for various areas within the Department, and developing tracking and reporting systems that monitor data warehouse activity.

These new employees, along with the five revenue agents that were added in 2005, combined to generate over $5.3 million in new revenue in 2006.

Additional auditors and other staff are scheduled to be hired in early 2007.

2. The proceeds in the Department of Revenue Enforcement Technology Fund have been used to purchase the following items in 2006:

• Computer Equipment - The Department upgraded the current data repository into a functional data warehouse by building a Storage Area Network (SAN).  The SAN is comprised of a group of computers that are used for storing large amounts of data.  This will enable an end user to manipulate large databases quickly.  The Department also purchased additional portable and desktop personal computers that allow employees to work at different locations and gives them more applications.     
• Software - The Department purchased a variety of Business Intelligence (BI) software that will be used for analyzing data.  This will enable the Department to more effectively organize, access, and manipulate information used in developing leads for tax compliance purposes.
• Lists - The Department has been considering many sources of information to examine for inclusion in the data warehouse.  Databases from other state agencies and data purchased from outside sources can be combined with our current collection of information in the data warehouse.  The resulting data can be analyzed and used to generate new leads.  One such list has been purchased and agreements with other state agencies are expected to be finalized in 2007. 
• Training – The Department purchased additional training for several employees during the year.  The training addressed SAN technology, matching software, and database programming.

Before purchasing the computer equipment, the Department’s Information Technology Service Area had to implement a plan to design the Storage Area Network (SAN).  This process was lengthy, as they had to identify how much and what types of equipment would have to be ordered, how it would interact with the existing network, how and where the new equipment would be stored, and what types of software should be acquired to run on the new system.  The equipment was received and set up was completed near the end of the year and is expected to be fully operational in early 2007.

3. The amount of new revenue obtained as a result of the new personnel and acquisitions during 2006 is broken down by tax program as follows:

The amount of new revenue obtained as a result of the new personnel and acquisitions during 2006 is broken down by individual taxpayers and business enterprises as follows:

It is important to note that the above-referenced numbers are amounts that have been collected as of December 31, 2006. Other tax revenue has been identified and is in various stages of the collection process.