Precisely > Case Studies > U.S. State Agency Solves IRS Pub 1075 Compliance Challenges with Ironstream for Splunk

U.S. State Agency Solves IRS Pub 1075 Compliance Challenges with Ironstream for Splunk

Customer Company Size

Large Corporate

Region

America

Country

United States

Product

Ironstream for Splunk
Splunk Enterprise

Tech Stack

Data Ingestion
Mainframe Operations Data

Implementation Scale

Enterprise-wide Deployment

Impact Metrics

Cost Savings

Technology Category

Analytics & Modeling - Data-as-a-Service
Application Infrastructure & Middleware - Data Exchange & Integration

Applicable Functions

Business Operation

Use Cases

Regulatory Compliance Monitoring

Services

System Integration

About The Customer

The customer in this case is a U.S. state agency responsible for providing workforce-development assistance to employers and job seekers. This agency plays a crucial role in handling unemployment benefit payments, which involves monitoring for erroneous or fraudulent payments. The agency is tasked with ensuring compliance with IRS regulations, specifically the 'Tax Information Security Guidelines for Federal, State and Local Agencies' as outlined in IRS Publication 1075. This regulation is particularly complex and requires the agency to follow strict procedures for recovering fraudulent or erroneous payments. The agency had already implemented the Splunk Enterprise analytics platform to manage distributed systems operational data. However, they faced challenges in ingesting native z/OS data, which is critical for IRS compliance. The agency's operations are significant, involving millions of dollars in unemployment benefits, and they are under pressure to recover funds efficiently while adhering to regulatory requirements.

The Challenge

Like many other state agencies trying to recover fraudulent or erroneous payments of unemployment benefits, this organization had been struggling to comply with an especially complex IRS regulation, “Tax Information Security Guidelines for Federal, State and Local Agencies”, as described in IRS Publication 1075. This agency provides workforce-development assistance to employers and job seekers, and it is involved in handling unemployment benefit payments. This operation has to be monitored for erroneous or fraudulent payments, and in those cases there are strict procedures for recovery that must be followed. That’s where IRS Pub 1075 comes in. The agency was well on its way to getting its arms around the problem because it had installed the industry-leading Splunk Enterprise analytics platform. Soon, however, the agency found that while Splunk had no problem ingesting all the distributed systems operational data, it wasn’t able to ingest native z/OS data on operations. This was a significant problem because z/OS logs held much of the information needed to ensure IRS compliance. In particular, the agency needed to get certain z/OS System Management Facility logs (SMF Records 30, 80, and 102) to meet IRS Pub 1075. Not only does the state need to recover the funds, but it needs to do so as efficiently as possible.

The Solution

Splunk, after validating specific requirements of the IRS Pub 1075 regulation, called in their counterparts at Precisely for help. Precisely is the developer of Ironstream for Splunk®, the industry-leading solution for accessing, transforming, and moving mainframe operations data into Splunk. After familiarizing itself with the joint development work between Precisely and Splunk, and with the track record of Ironstream for Splunk in addressing similar challenges, the next step for this agency was clear. They selected Ironstream for Splunk to complete the solution. This government agency is now better able to recover benefits that should not have been paid, amounting to millions of dollars annually. They also can report effectively on all compliance-related elements of applicable IRS regulations, including IRS Pub 1075. Going forward, the agency is planning a follow-on project to recover unemployment taxes from company tax returns in cases where companies are not up to date on unemployment insurance premiums.

Operational Impact

The agency is now better equipped to handle compliance with IRS regulations, specifically IRS Pub 1075.
The implementation of Ironstream for Splunk has enabled the agency to effectively report on all compliance-related elements.
The agency is planning a follow-on project to recover unemployment taxes from company tax returns, indicating improved operational capabilities.

Quantitative Benefit