Help! I Lost My Driving License Due to Unpaid Taxes in New York
Failure to pay your New York State tax bill can lead to all kinds of unwanted consequences, including wage garnishment and asset seizure. However, before the state takes those actions, it's highly likely to issue a tax warrant and take away your driver's license.
New York Tax Law section 171-v (5) gives the Department of Tax and Finance (DTF) the right to take away your license. The state leans heavily on this program because it's highly effective at getting people to pay. Between 2013 and 2017, New York State collected $738 million in unpaid taxes through this program. That's about $185 million per year.
Behind on your state taxes? Worried that you're going to lose your license? You'll be happy to know that there are a few ways to stop this from happening. To get help right now, use TaxCure to find a tax pro based in New York. They can help you deal with the NY DTF and get back on track.
Driver's License Suspension Due to Unpaid NY State Taxes
If you owe more than $10,000 in unpaid taxes, the state can rescind your driver's license. The state may also take away your license if you default on a payment arrangement more than once in a 12-month period.
Losing your license hurts anyone, but it's especially difficult for people who live in car-based parts of the state. Without your license, it's impossible to get to work, transport your children, or take care of other necessities.
How to Challenge a License Suspension in New York
If the state notifies you about a license suspension, you can challenge the decision if any of the following apply:
- The suspension was issued in error to the wrong taxpayer.
- You have already paid your past-due taxes.
- Your wages are already being garnished for the unpaid taxes.
- Your wages are being garnished for unpaid child support or spousal maintenance.
- You are paying court-ordered child support or spousal maintenance.
- You have a commercial driver's license.
- You receive public assistance or supplemental security income.
- You prove that suspending your license will cause economic hardship.
- You're seeking innocent spouse relief on the unpaid tax bill.
- You have filed for bankruptcy, and the courts have issued a stay.
To challenge the suspension, you must reach out to the DTF before they suspend your license. Typically, the Department sends out at least two notices with instructions on how to respond before taking your license away. If you've already lost your license or you're not sure how to challenge the suspension, contact a New York tax pro directly for help.
Depending on the situation, you may be able to get a limited suspension. With a restricted driver's license, you can drive to and from work, school, medical appointments, and the DMV. You can also drive your children to a childcare provider who watches them while you are at work or school.
If you don't qualify to challenge the suspension, you should request a restricted license. Then, you will at least have the right to drive for essential needs. However, whenever possible, you should attempt to make payment arrangements before the state takes your license.
What to Expect If the State Suspends Your Driver's License
In most cases, you will receive several notices about the unpaid taxes before the state escalates to a driver's license suspension. If the DTF decides to go after your license, they will send a Notice of Proposed Driver's License Suspension. This notice gives you 60 days to resolve your tax liability, and if you don't make arrangements during that time, the DTF will contact the Department of Motor Vehicles.
Then, the Department of Motor Vehicles will send you an Order of Suspension or Revocation Notice to resolve your tax debt by a 15-day deadline. If you don't pay your taxes, challenge the suspension, or make other arrangements, the state will move forward with the suspension, and you will lose your driving privileges. If you drive with a suspended license, you risk getting arrested and facing charges.
How to Avoid Losing Your Driver's License
Ideally, you don't want to be in a situation where you're challenging a driver's license suspension. Instead, you want to avoid this action altogether. To do that, you must contact the DTF before they send notices about taking away your license.
When you can't afford to pay your taxes, ignoring the situation often seems like the easiest answer. A lot of people ignore notices from the state revenue department or the IRS because they simply don't want to think about the issue. Owing taxes can be incredibly stressful, but to protect your finances (and your driving privileges), you need to face the issue head-on.
To avoid, losing your license, contact the DTF or talk with a tax professional about making one of the following arrangements on your tax liability:
- Pay in full — Paying in full is the most effective way to avoid collection actions from the state. To reduce the headaches associated with unpaid taxes, you may want to use a credit card or a loan to make the payment. Remember, penalties and interest accrue on all unpaid taxes, so you may come out ahead by borrowing money to pay your bill.
- Monthly payment plan — Make monthly payments until the debt is paid in full. The state lets both businesses and individuals make monthly payment plans.
- Innocent spouse relief — In New York, you may be able to qualify for relief if your tax debt was due to unreported income or erroneously claimed deductions that your spouse took without your knowledge. If you qualify, the state will give you relief from their portion of the bill. There is a similar program to help with delinquent IRS taxes.
- Offer in compromise — When you truly cannot afford to pay your taxes (even by selling your assets or putting all of your disposable income toward the bill), the state may allow you to settle for less than you owe. Qualifying for an offer is very challenging, but in the right situation, this program can be invaluable.
- Establish economic hardship — The state is trying to get taxes paid. It's not trying to harm citizens. If you have a legitimate economic hardship due to the license suspension, reach out to the state as soon as possible after receiving the notices warning you about the suspension.
How to Get Your License Back After a Suspension
What if you've already lost your license due to unpaid taxes? First, make sure that you don't drive. Getting caught driving without a license will lead to much more severe penalties and possible legal charges, making the situation much worse. Then, do one of the following as soon as possible.
- Pay your taxes in full — If you can find a way to pay in full, that is the most effective way to put state tax debt behind you.
- Request a monthly payment plan — If you qualify for monthly payments, the DTF will advise the DMV to put the suspension on hold. Then, if you make payments satisfactorily, the state will lift the suspension completely. If you default on the agreement, the state will resume the suspension.
- Establish economic hardship — There are several different ways you can qualify to get your suspension lifted, due to hardship. Contact the DTF directly or reach out to a tax professional for help.
How to Check the Status of Your NY Driving Privileges
If you've recently moved or haven't been opening your mail, you may have lost your license without realizing it. So, how do you check? Go to the New York DMV website. Then, scroll down the page until you see "Check License/Driving Privilege Status" under "Other License Options". Then, click that link and follow the prompts to check on the status of your license.
Get Help Now
Struggling with unpaid taxes? Tired of dealing with the state on your own? Worried about losing your license? Then, it's time to get help from a licensed New York State tax professional.
Don't reach out to the big tax resolution firms that overcharge and lack state experience. Instead, use TaxCure to connect with a local tax attorney, enrolled agent, or CPA who has dedicated experience dealing with the NY DTF and helping taxpayers get lasting resolutions.