The New York State Department of Taxation and Finance (NYS DTF) collects over 1billionannuallyinassesseddelinquenttaxes.ThemissionofDTF′sCollectionsandCivilEnforcementDivision(CCED)istoincreasecollections,buttodosoinamannerthatrespectstherightsofcitizens,bytakingactionscommensuratewitheachdebtor′ssituation.CCEDmustaccomplishthisinanenvironmentwithlimitedresources.Inacollaborativework,NYSDTF,IBMResearch,andIBMGlobalBusinessServicesdevelopedanoveltaxcollectionoptimizationsolutiontoaddressthischallenge.Theoperationsresearch−basedsolutioncombinesdataanalyticsandoptimizationusingtheunifyingframeworkofconstrainedMarkovdecisionprocesses(C−MDP).Thesystemoptimizesthecollectionactionsofagentswithrespecttomaximizinglong−termreturns,whiletakingintoaccountthecomplexdependenciesamongbusinessneeds,resources,andlegalconstraints.Itgeneratesacustomizedcollectionspolicyinsteadofbroad−brushrules,therebyimprovingboththeefficiencyandadaptivenessofthecollectionsprocess.Italsoenhancesandimprovesthetaxagency′sabilitytoadministertaxesequitablyacrossthebroadscopeofindividualtaxpayers′situations.ThesystembecameoperationalinDecember2009;from2009to2010,NewYorkStateincreaseditscollectionsfromdelinquentrevenueby83 million (8 percent) using the same set of resources. Given a typical annual increase of 2 to 4 percent, the system's expected benefit is approximately 120to150 million over a period of three years, far exceeding the initial target of $90 million. © 2012 INFORMS.