The state of New York recovered $83 million in delinquent taxes in 2010, an increase of 8% over the previous year its Department of Taxation and Finance is attributing to the use of IBM data-analytics software.

The department is crediting its use of IBM's Tax Collections Optimizer for a host of new efficiencies and workflow improvements it achieved in its processing of 2010 taxes, it said in a press statement.

New York has been working with IBM since 2004 to leverage data analytics in the tax return process, realizing more than $1 billion in savings since then by using software to identify questionable refund claims, it said.

In 2010, the department implemented the company's Tax Collections Optimizer, a specialized combination of IBM software, hardware, and services that combines data analytics and other data modeling to create individual action plans for tax cases, said IBM spokesperson Randy Zane.

The Tax Collections Optimizer is the result of collaboration between IBM Research and consultants from IBM Global Business Services. The solution--which runs on general-purpose IBM hardware--includes software from IBM's information management, business analytics, and middleware portfolios, as well custom innovations developed by the company, Zane said.

One of the features of the system is aimed at improving the quality of enforcement actions when people haven't paid their taxes. The state issues warrants and levies as part of this activity, which can mean costly penalties for taxpayers. In fact, collection of these accounts for $250 million and $150 million in revenue each year for the state, it said.

In 2010, New York was able to collect even more revenue as part of its enforcement activity by using IBM's solution, according to the department. Revenues overall increased 7% in 2010, with revenue from warrants increasing 13%. Dollars per warrant and per levy also increased in 2010, 22% and 11%, respectively.

There were other financial gains as well, according to the department. Overall collections from the field increased 12%, and dollars per staff day increased 15% across all field offices. That increase was more than 40% in the New York City metro office, according to the state.

Even though the financial gains are obviously good for the state, an official said that the department is not in the business of gouging taxpayers. To this end, IBM's solution has been effective in helping it ease the penalty burden in some cases as well, New York State Department of Taxation and Finance Commissioner Thomas H. Mattox said in a press statement

"In this difficult economic climate, another very important result for us is that in many cases the analytics inform us that we don't have to take an aggressive action - a less intrusive path will be as effective," he said. "This has allowed us, when appropriate, to lighten our impact on taxpayer credit ratings long term while still collecting outstanding tax liabilities due to New York State."