May 23, 2010

Douglas H. Shulman
Commissioner
Internal Revenue Service
1111 Constitution Avenue NW
Washington, D.C. 20224

Re: The impact the UBS scandal has on New York’s budget deficit
and the urgent need for the immediate release of all New York clients that
participated in the illegal UBS scheme

Dear Commissioner Shulman,

As the federal government is forced to deal with an historic budget shortfall, many states such as
New York are also suffering from record levels of budget red ink. As we in the legislature in New York are
required to close a painful $9 billion deficit, we have a solemn obligation to put our fiscal house in order
and to be honest with the taxpayers of the state. Unfortunately, many wealthy individuals and
corporations have not been honest on their tax forms and/or met their tax obligations. In effect, these
illegal actions have shifted enormous burdens onto the backs of millions of hard working families.
The recent and ongoing investigation of Swiss bank giant UBS sheds new light on the scheme used
by many wealthy individuals to shift the tax burden onto middle and low income families of this country.
The size and scope of the UBS scandal is simply breathtaking. According to reports, over the last decade
UBS had helped over 17,000 wealthy American clients set up sham accounts overseas to avoid paying
taxes to the U.S. government. It is estimated that these deceptive tax shelters have cost the federal
government billions of dollars in uncollected revenue.
What has not been discussed is the cost to states such as New York since it has been reported
many of the over 17,000 clients live in the Empire state. It is absolutely vital that the New York State
Department of Taxation and Finance be immediately given every single name of those clients that live or
lived in the state during the time of the illegal activity to account for every single dime that is legally owed
to New York’s taxpayers. In an article in Reuters dated April 12, 2010, William Comiskey, New York State
Tax Department’s Deputy Commissioner for enforcement, was quoted as saying “That’s really a deep well
and I expect we’ll be digging in that well for some time.” The deputy commissioner was referring to the
“considerable sums” New York could recoup from UBS clients who have evaded taxes once the federal
government starts handing over its data to the states. Deputy Commissioner Comiskey and every relevant
government official from Washington, D.C. to Albany, NY should grab a shovel and immediately begin
digging up that well. New York has over 19 million volunteers who would be more than glad to assist in
the effort.
Only with the immediate release of those names and data will we in New York know how
considerable these sums are, which I presume to be in the billions of dollars range, including interest,
since this activity lasted for over a decade. What we do know is how considerable and devastating the
effects of the cuts that have been proposed in New York will be on working families, seniors, and children.
As I write you this letter, plans are being drawn up in my state to close hospitals, lay off nurses and
teachers, shut down senior centers, furlough state workers, abandon historic state parks, delay vital
infrastructure projects, and the painful list goes on and on. Further delay is not acceptable under these
severe and dire circumstances.
Because we cannot wait a single second longer for this vital information, I am strongly urging your
office to immediately hand over all of the data relevant to New York so that our tax department is able to
promptly commence issuing tax warrants against these tax cheats. We must do everything in our power
to expose the greed and illegal behavior of these individuals to avoid balancing our budget on the backs of
New York’s hard working families.
Thank you in advance for your sincere concern and I look forward to your expeditious response in
regard to this crucial matter. Please feel free to contact me at any time to follow up on this issue at 718-
236-1598.

Sincerely,

William Colton
Member of Assembly

Cc: Hon. Jamie Woodward, Acting Commissioner of NYS Department of Taxation and Finance
Hon. David Paterson, Governor of the State of New York
Hon. Andrew Cuomo, Attorney General of the State of New York
Hon. Eric Holder, Attorney General of the United States