Quoting from the "Intel-IOMMU.txt" file included in the Linux kernel documentation:
"If you encounter issues with graphics devices, you can try adding option intel_iommu=igfx_off to turn off the integrated graphics engine. If this fixes anything, please ensure you file a bug reporting the problem."
Apparently the GPU in this case was not working properly with the DMAR (DMA Remapping) feature provided by the Intel chipset. Using the "igfx_off" parameter allows the GPU to access the physical memory directly without going through the DMAR.
The purpose of the DMAR feature is to enable things like direct assignment of hardware to virtualized guests. If you have to use the "igfx_off" parameter then you probably won't be able to use this GPU in such a direct-assigned virtualization scenario.