Recently, the NYS Department of Taxation and Finance introduced a new Commissioner, Jerry Boone. As the leadership changes, the time could be right for a fresh look at Department policies or procedures.

One welcome development would be a modification of the driver’s license suspension program.

In 2013, the legislature gave the Department the ability to authorize the suspension of a taxpayer’s driver’s license for the nonpayment of taxes. With the enactment of Section 171-v of the Tax Law, a taxpayer who owes $10,000 or more is at risk of having his license suspended. If he can work out a collection resolution with the Department, however, his license won’t be affected. The taxpayer generally has sixty days from the date of the proposed suspension letter before being referred to the Department of Motor Vehicles for action.

The taxpayer has a few options during that sixty-day period. Prompt payment in full is often the best way forward for those who can manage it. Taxpayers can pay online or mail in payment. It may be helpful to call the State to let them know that payment is coming soon; the State might hold off on levying a bank account or filing a warrant if they are aware that payment will be made in a few days or so.

Taxpayers who need more time to pay may be able to enter into an Installment Payment Agreement, making monthly payments until the liabilities are paid in full. Interest and penalties will continue to accrue. Alternatively, a taxpayer who is working and earning income may qualify for an income execution, where the State will take ten percent of the taxpayer’s paycheck. Another option is to enter into a settlement through the Offer in Compromise program.

Unfortunately, not everyone with a tax liability can work out a resolution. According to the Department, these taxpayers can apply for a restricted driver’s license. But the law applicable to restricted licenses, part of the Vehicle and Traffic Law, limits drivers who should not be on the road to journeys necessary for work, medical reasons, or school. Taxpayers who are retired or unemployed, for example, do not appear to be eligible for a restricted license. And there are no exceptions or special considerations for these individuals in Section 171-v of the Tax Law either.

There should be a policy or procedure available to assist financially distressed taxpayers who aren’t able to resolve their tax problems in the usual ways, especially if they also are not eligible for a restricted license. These taxpayers may be punished by losing their driving privileges, and the law provides no avenue for relief.

Submitted by Tenenbaum Law on Wed, 07/22/2015 – 20:10