NY to Tax Scofflaws: Pay or License Gets Suspended

By Michael Virtanen
|  Monday, Aug 5, 2013  |  Updated 5:48 PM EDT
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NY to Tax Scofflaws: Pay or License Gets Suspended

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New York has begun sending notices to 16,000 delinquent taxpayers threatening to suspend their driver's licenses if they don't pay up, officials said Monday.

The initiative, authorized under a new law that took effect April 1, targets New Yorkers with past-due tax liabilities of more than $10,000.

Officials expect to collect $26 million this year and up to $6 million annually after that. While 96 percent of taxes are paid reliably by businesses and individuals, officials said 4 percent are collected through audits, collections and criminal investigations that bring in about $3 billion annually.

"Our message is simple: Tax scofflaws who don't abide by the same rules as everyone else are not entitled to the same privileges as everyone else," Gov. Andrew Cuomo said in a statement. He proposed the measure in his January budget plan for this year.

Delinquent taxpayers notified by the state will have 60 days to arrange payment or receive a second letter with a 15-day deadline, after which the recipient's license will be suspended for failure to establish a payment plan.

The Department of Taxation and Finance has sent 4,000 notices so far and plans to send the rest in the coming weeks, spokesman Geoffrey Gloak said. They go to individuals for unpaid income taxes and for business sales taxes, which list one or more responsible individuals.

"If a business hasn't been remitting sales tax, which is particularly egregious since they're collecting sales tax and not remitting it to us, then the responsible person could be eligible to lose their driver's license or having it suspended," Gloak said.

The department had six months to ramp up its collection effort and is ahead of schedule. The estimated dollar amounts take into account that some taxpayers will ignore the notices and others will set up payment plans where full amounts aren't paid the first year, Gloak said.

State data show 11,324 drivers owe nearly $478 million in personal income taxes. Another 3,329 owe nearly $413 million from business taxes. A third group of 1,307 licensed drivers owes $239 million in combined personal and business taxes, according to the department.

The past-due liabilities are described as "fixed and final," where the taxpayer has exhausted his or her rights to administrative and court review. The new collections approach was modeled after the state program using license suspension to compel child support payments.

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