On March 28, 2013, Governor Andrew Cuomo signed a bill into law that, among other things, allows the New York State Department of Motor Vehicles (the "DMV") and the New York State Department of Taxation and Finance (the "DTF") to work together in order to suspend the drivers' licenses of taxpayers who have delinquent tax liabilities due to New York State in an amount equal to or greater than $10,000 (the "Bill"). In August 2013, in accordance with the Bill, the DTF began sending notices to the approximately 16,000 taxpayers who are delinquent on their tax liabilities. If you are one of these taxpayers, you may have your driver's license suspended by the DMV if you do not take the appropriate action.

Taxpayer's Rights Under the Bill

Under the Bill, any taxpayer with "past-due tax liabilities" in the amount of $10,000 or more will receive a letter from the DTF that includes a statement of the taxpayer's past-due tax liabilities (the "Consolidated Statement of Liabilities"). "Past-due tax liabilities" are defined as those tax liabilities that are fixed and final in which the taxpayer no longer has any right to administrative or judicial review of those liabilities. The letter will include information about how the taxpayer can pay the liabilities and/or request additional information and will also serve as notification that the taxpayer's driver's license can be suspended by the DMV.

A taxpayer who receives a notification letter will have sixty (60) days to respond to the DTF. Specifically, he or she must do one of the following to avoid the suspension of his or her driver's license: (1) pay the past-due amount in full or enter into an installment payment agreement (an "IPA") or other payment arrangement satisfactory to the Commissioner of Taxation and Finance, or (2) challenge the action by providing proof that he or she is not liable for the debt nor an individual subject to collection. The Bill permits a taxpayer to challenge the suspension of his or her driver's license by providing proof that: 1) the individual to whom the notice was provided is not the taxpayer at issue; 2) the past-due tax liabilities were satisfied; 3) the taxpayer's wages are already being garnished by the DTF for the payment of the past-due tax liabilities at issue; 4) the taxpayer has a satisfactory payment arrangement with a support collection unit in place for past-due child support or combined child and spousal support arrears; 5) the taxpayer's driver's license is a commercial driver's license as defined under the Vehicle and Traffic Law (the "VTL"); 6) the DTF incorrectly found that the taxpayer failed to comply with the terms of an existing payment arrangement made with the DTF; 7) the taxpayer is seeking innocent spouse relief; or 8) the enforcement of past-due tax liabilities has been stayed by the filing of a [petition with a United States Bankruptcy Court.

Implications For Taxpayers

If a taxpayer's license is ultimately suspended, the suspension will remain in effect until the DMV receives notice that the taxpayer has paid off or is making efforts to pay off his or her outstanding tax debts. It is important to note that, despite a taxpayer having his or her license suspended for failure to pay past-due tax liabilities, he or she can still apply for a restricted use license under the VTL, thereby enabling the taxpayer to drive to and from work or school. If the taxpayer does not already have a license, the suspension applies to the privilege of obtaining a driver's license.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.