Cameron University wants to help state find tax evaders

Journal Record, The (Oklahoma City), Apr 4, 2002 by Marie Price

Operating on the assumption that a lot of financial activity goes untaxed because various databases don't talk to one another, Cameron University wants to get them chatting in a project that President Don Davis says could net the state $9 million a year.

Davis told the House Revenue and Taxation Committee on Wednesday that Cameron is one of six U.S. universities to receive $7 million supercomputers from Wal-Mart Corp. that could perform this task. He said the plan is to compare data from the Oklahoma Tax Commission, Internal Revenue Service, Oklahoma Employment Security Commission, SIC codes and financial analyses from firms such as Dun and Bradstreet to identify non-filing or under-filing taxpayers. Results would be provided to the tax commission.

"It allows revenue enhancement to the state without a tax increase," said Davis, a former lawmaker.

Cameron's partner in the effort is NCR, the computer's manufacturer, which has similar contracts in Texas and Iowa.

"They've had extremely good results for both of those states," Davis said.

The Texas contract does not involve a university, he noted. He told committee members that the Texas project has recovered close to $100 million, chiefly in sales and business franchise taxes. Texas has no personal income tax.

Davis was appearing before the House panel, chaired by Rep. Clay Pope, D-Loyal, backing legislation by Rep. Abe Deutschendorf, D- Lawton, that addresses the issue of confidentiality of tax-related information.

Senate Bill 1447, authored in the Senate by Senate President Pro Tempore Stratton Taylor, D-Claremore, authorizes the tax commission to contract with Cameron on the project. The measure stresses that taxpayer information released to the university is to be considered confidential and privileged, and neither Cameron nor any of its employees or other individuals may disclose such data. Unlawful disclosure is a misdemeanor.

The university is not unfamiliar with the stringencies of confidential information, Davis noted. He pointed out that for 15 years Cameron has conducted weapons system analyses and other studies for the U.S. Department of Defense.

"Information security is one of our specialties at Cameron," Davis said.

A former IRS deputy commissioner for collections will run the project.

Cameron will be compensated with a percentage of the additional revenues realized through use of its computer server. Davis said that the school will also recover costs, such as for personnel, software, computer time and the like. NCR will receive $1.5 million for development of software packages, which will become the property of the state. Continuing costs are projected at about $300,000 per year, startup costs at between $1.5 million and $2 million.

Davis said that results should be forthcoming within eight or nine months of startup.

Rep. John Nance, R-Bethany, questioned whether Cameron could legally receive such sensitive information. Nance, who at one time worked with the Office of the Attorney General, said that his agency was denied tax information for use in non-tax-related criminal cases.

Davis said that situation differs from the data-collection contract, which is limited exclusively to hunting down tax evaders.

David Smith, deputy director of tax policy with the tax commission, said that by law the agency cannot disclose information except for tax-related purposes.

The bill passed out of committee without amendment.