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By Michelle Breidenbach / The Post-Standart, January 17, 2010
Syracuse, NY -- Another crazy idea popped into Bill Comiskey's head: What if the tax department required banks to turn over their customers' mortgage applications?
Homebuyers fill them out at a time when they want to impress the bank with their incomes. They sometimes are not in the same mood when they fill out their tax returns. Investigators could compare the two records, look for clues.
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Every piece of personal information is on the table these days at the tax department, where a desire to collect taxes on the underground economy is prompting new and aggressive tactics. Comiskey, a one-time Mafia prosecutor, has been armed by lawmakers with new powers. His staff is for the first time pulling information from third parties into a continuous river of information about businesses and individuals.
The tax department is brainstorming a kind of data mining most often associated with Homeland Security.
Is a bar underreporting its sales? Annual reports from liquor wholesalers would show it.
Is a pizza franchise selling more pies than it is reporting to the state? The chain's parent company might have to show how many pizza boxes it sent to the local shop.
Is a car dealer low-balling its sales? Check the records over at the DMV.
The new approach makes New York a leader in the pursuit of tax cheats and has put tax professionals and businesses on alert that New York is no longer soft on fraud. Some tax professionals say the state is being unnecessarily antagonistic, particularly toward cash businesses that do not keep great records.
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The audit division set a record in Comiskey's first year, producing $3 billion in revenue - $1 billion more than the year before.
Criminal tax fraud investigations increased from 581 in the '06-'07 fiscal year to 2,078 in the '08-'09 fiscal year. Nearly 600 cases were referred to prosecutors that year, about three times as many as the last year of the previous administration.
Comiskey's methods are catching a lot of attention from other states and from taxpayers. Read full story.