Owe State Back Taxes? Your Driving Privileges May Be in Jeopardy
With states scrambling to generate more revenue to balance their budgets, California Governor Jerry Brown upped the ante by signing a bill on October 4th, 2011 that aggressively goes after the state’s top tax delinquent citizens by denying their driver’s license and publishing their names for public view.
Celebrities are not above the Hall of Shame —the state’s list of top tax debtors include Halsey Minor, one of the founders of CNET, who is said to owe $14.2 million in income taxes, and former “Baywatch” star Pamela Anderson with an income-tax debt of $607,000.
Laura Sanders’ recent article in the Wall Street Journal, State-Tax Deadbeats Face Tough New Measures, reports that several states are ramping up collection efforts as the usual methods of liens and wage garnishment are costly and take too long to see results. So in an effort to raise collections to fill the coffers, states are looking for smarter and more creative ways to do so. According to Sanders, California driver’s license suspensions affecting the state’s top 1,000 tax debtors will begin in shame -their names will be published online in two lists of 500 each next July 2012 – and subsequent suspensions to take place beginning in October.
The taxpayers on the “list” already have a tax lien filed against them and will have at least 90 days after formal notice is issued before licenses are suspended, according to state officials.
No Place to Hide-Professional Licenses Also Affected
As state money gets tighter, citizens need to be aware that the stakes will become significantly higher and ignoring tax debt could mean not only the loss of basic privileges such as driving but also the ability to do business in a particular state. California’s newer, tougher collection policies include the suspension of professional licenses that affect physicians, nurses, opticians, and beauticians. The new law also has the authority to suspend liquor and legal licenses, but not required to do so. California’s efforts using debtor lists since 2007, (which the new law has expanded on by doubling the number of names and adding the license suspension) has yielded over $85 million.
Creative Collecting of Tax Revenues is Not Unique to California
Sanders notes that least 19 states, including Wisconsin, North Carolina, New York, Florida, Montana, Connecticut, Kentucky and New Jersey, follow California’s approach to online list publishing of the names of tax delinquents online. Other states have their own ideas of creative collection methods to recoup back taxes:
- Kansas, attempting to entice older tax debt cases is currently waiving penalties if a settlement is made within 60 days. Kansas is cooperating with their neighbor, Missouri to withhold funds from Missouri residents with tax debt who live/work in their state.
- Iowa blocks vehicle registration for past due tax debt.
- Minnesota prohibits rental of booth at state fair if tax delinquent.
- Louisiana will not renew fishing or hunting license if tax due amount is over $500.
For more details, read the whole article here.
Tax issues are a complicated matter and with states making collection efforts a big priority, it’s best to resolve them before they spiral out of control. If you have back tax issues, you are advised to speak to a Certified Tax Resolution Specialist who can help resolve your matter and keep you in the driver’s seat for good.
More Tax Help, IRS News and Tax Relief Tips:
- Tax Resolution Services interviewed by Terry Bradshaw
- IRS Tax Relief News: Tax Case Convictions on the Rise For Americans with IRS Problems
- Distressed Homeowners Can Resolve Their IRS Back Taxes
- Retire Your IRS Back Taxes Forever: How Tax Resolution Services Helped Save a Taxpayer $130,000
- Got back taxes? It’s Never Too Late to File a Tax Return
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