Due to federal budget cuts and a stagnant economy, states are more cash strapped than ever and looking for ways to generate revenue. New York State’s solution: revoke driver’s licenses of tax deadbeats. Tax Girl, Kelly Phillips Erb reports in her article titled: “You Can’t Drive 55: NY Suspends Driver’s Licenses for Tax Delinquents“, that beginning this year, drivers who owe more than $10,000 in state taxes face losing their license until the tax debt is paid. This crackdown reflects a state budget revenue raising measure approved by lawmakers in March of this year.
About this new collection tactic, New York Governor Andrew M. Cuomo was quoted in the Forbes article stating the reason for such tough action:
“Our message is simple: tax scofflaws who do not abide by the same rules as everyone else are not entitled to the same privileges as everyone else. These worst offenders are putting an unfair burden on the overwhelming majority of New Yorkers who are hardworking, law-abiding taxpayers.” Governor Cuomo also said that by creating more severe consequences for tax delinquencies, [the state] would be able to collect the taxes owed and “keep scofflaws off the very roads they refuse to pay their fair share to maintain.” ~ Governor Cuomo
Apparently, Governor Cuomo has good reason for his rhetoric based on some of the facts the Forbes article points out:
- New York State has a 96% voluntary compliance rate for businesses and individuals but has a 4% tax gap the governor would like to tap into.
- The Tax Department estimates that collections will be increased by $26 million this fiscal year alone. By pushing this program, they estimate collecting about $6 million each year thereafter.
- Incredibly, more than half of the anticipated collection appears to be owed by one individual taxpayer: Michael D. Zurawin of Putnam County. According to the state’s list of top offenders, Zurawin owes $16.7 million in delinquent personal income taxes alone dating back to 2004!
Necessity is the mother of all invention
Taking away driving privileges is not a new concept for states. A previous blog post written back in October of 2011 reported on “new” legislation signed by California Governor Jerry Brown that would aggressively go after the state’s top tax delinquent citizens by denying their driver’s license and publishing their names for public view. The suspensions affected the state’s top 1,000 tax debtors who already have a tax lien filed against them. These newer, tougher collection policies also included the suspension of professional licenses for physicians, nurses, opticians, and beauticians. California’s collection efforts using the expanded debtor lists, has yielded over $85 million in revenue.
However, California was not the only state mentioned in the post that was getting creative with tax collection. 19 states, including Wisconsin, North Carolina, New York, Florida, Montana, Connecticut, Kentucky and New Jersey, began a push to publish online of the names of tax delinquents online and create collection methods that would recoup back taxes. Here is a link to that original blog post: http://www.taxresolution.com/blog/owe-state-back-taxes-your-driving-privileges-may-be-in-jeopardy/
What’s becoming clear is that states are making collection efforts a big priority, so it’s best to resolve them before you lose your driving privileges. If you owe back taxes to the IRS or a state taxing authority, your best defense is to speak to a Certified Tax Resolution Specialist who can help keep you in the driver’s seat by resolving your tax problems for good.
More Tax Help, IRS News and Tax Relief Tips:
- Ask the Certified Tax Specialist – Small Business Back Taxes
- Tax Relief Weekly News Round Up
- Tax Expert Gives Tax Filing Info on Fox News
- Tax Resolution Services Offers Returning Veterans Free Tax Advice
- New Offer in Compromise Policies Bring Tax Relief