Cuomo Administration faces a flurry of criticism over access to tax records

The Albany Times Union first reported that a memo of understanding between Governor Cuomo’s tax department and his Inspector General’s office gave the entire IG’s staff new powers to view the tax returns of any state employees, and any other taxpayer whose files might be considered relevant to an investigation. 

In the new arrangement, all 62 members of the Inspector General’s staff were deputized as assistant tax commissioners.  

The paper reports that at least one tax law professional deemed the move “illegal”, and accused the Cuomo Administration of authorizing “fishing expeditions”  among the tax documents of state workers.   

The news led to questions and concerns from state lawmakers, who confronted Cuomo’s Tax Commissioner, Thomas Mattox, at a budget hearing. Senator John DeFrancisco is Finance Committee Chair.

“That doesn’t trouble you at all, that 62 people in the Inspector General’s office now will be able to gain access to tax records of state employees?” DeFrancisco asked.

Commissioner Mattox, who seemed caught off guard, responded.

“It does not trouble me,” said Mattox, who maintains that access will be “very tightly defined”, and will only apply to New York State employees “under specific investigation for tax related issues.”

Mattox explained that until recently, the tax department had a deputy inspector general for tax matters. That person was part of the main Inspector General’s office, and authorized to look at the taxes of state workers.

Now, that tax department deputy inspector general has been moved back to the Inspector General’s office. As a result, Mattox says, all of the IG’s staff needed to be authorized to look at the tax records so they could receive the proper training should the documents cross their desks.  

Assembly Ways and Means Committee Chair Denny Farrell questioned Mattox why  all 62 members of the Inspector General’s office had to be authorized to view state employees’  tax returns, when previously, just one person was enough?

Mattox, after further questioning, admitted that the prior arrangement “appeared to work”; he then blamed the Inspector General’s office for requesting the expansion.  

The answers did not satisfy Assembly Speaker Sheldon Silver, who says he worries about people’s privacy under the new arrangement.

“I think we should take a look at it,” Silver said. “And see exactly the terms and conditions that are contained therein.”

 Silver says normally a judge’s approval is required and subpoenas are issued before tax returns can be examined.  

Later in the day, the Tax Department and Inspector General’s office issued a joint statement calling the Times Union story “misleading and inaccurate.” They say a simple instance of government consolidation was misunderstood, and that they were just moving the Office of the Deputy Tax Inspector General into the Office of the State Inspector General, and so they had to authorize more staff to have access to the tax returns. They say the MOU “does not and was not intended to expand or diminish any authority or function, and to assert otherwise would be wrong.”