In New York State, you can lose your driving privileges for unpaid taxes. The law allows the Department of Taxation and Finance (DTF) to alert the Department of Motor Vehicles (DMV) if you owe $10,000 or more in unpaid taxes. Once the DMV is notified, they will revoke your driving privileges within 15 days.
You can save your license by paying in full, setting up payments with the state, or qualifying for an exemption. To get help now and talk about your options, contact us at the Law Offices of Stephen B. Kass today. In the meantime, here is what to expect and an overview of your resolution options.
What Happens Before the DTF Takes Away Your License?
If you don’t pay your New York State taxes, the DTF will apply penalties to your account and send you several demands for payment. The agency may also threaten to seize your bank account, garnish your wages, or take other actions.
Then, the agency will send you a Notice of Proposed Driver’s License Suspension. You have 60 days to respond to this letter. If you don’t make payment arrangements or get your account marked as uncollectible, the DTF will contact the Department of Motor Vehicles, and the DMV will rescind your driving license.
What to Expect If You Lose Your License
Once the DTF sends the notice to the DMV, your license will be revoked within 15 days. After this point, your license will not be legally valid. If you get pulled over while driving, you will be cited for driving without a license, which can lead to a penalty of up to $300, as well as other consequences. The suspension is indefinite, and you must contact the DTF to get your driving privileges back.
How to Get Your License Back
If you do one of the following, you should be able to get your driver’s license reinstated:
- Pay in full.
- Establish financial hardship.
- Make payment arrangements with the state.
How to set up payments after the DMV takes your driving license
New York offers monthly payment plans to qualifying taxpayers, but you must get approved. Simply making payments will not help you get your license back. You must set up an established payment plan where the DTF agrees to contact the DMV to reinstate your license.
If you owe $20,000 or less and can pay off the full balance over three years or fewer, you can generally set up a payment plan on the DTF’s website. If you’re outside of these thresholds, you need to contact the DTF directly to request payments.
How to apply for hardship if the DMV takes your license for unpaid taxes
If paying your taxes would make you unable to afford necessary living expenses, you may qualify for a hardship exemption. If you do, the Department will stop all collection actions until your financial situation improves.
To apply, contact the DTF or work with a tax professional. File Forms DTF-5 and Form DTF-5.1. These forms gather your personal, tax, and financial information. You will share nearly every detail about your income, assets, debts, and expenses so that the Department can decide whether or not you qualify for hardship. Once you get approved, you will get your license back.
FAQs About License Revocation for Unpaid New York Taxes
Did I already lose my license?
Worried that you already lost your license? If you’ve been throwing away DTF collection notices, it’s possible that you may have lost your license without your awareness.
To check, go to the NY DMV website. Set up an online account or sign into your existing account. Then, select My License, Permit, or ID, and on the next page, you’ll see if your license is still active or not.
Can I appeal if the DMV takes my license away?
Unfortunately, you cannot appeal if the DTF tells the DMV to revoke your license. However, if the revocation was done in error or if you’re in the midst of applying for a relief program such as innocent spouse relief, you can get the DTF to provide an exemption. You can also get an exemption if you are receiving certain forms of public assistance or have a commercial driving license.
Which exemptions does the DMV offer for license revocation?
If you meet any of the following criteria, you qualify for an exemption, and the DMV cannot rescind your license for unpaid taxes:
- Paid in full.
- Wages are already being garnished for this New York tax debt.
- Wages are being garnished for child support.
- Hold a commercial driver’s license.
- Applied for innocent spouse relief.
- In bankruptcy.
- Receive public assistance, including Supplemental Security Income (SSI).
You may also qualify for an exemption if you establish that paying the tax would lead to financial hardship, as outlined above. If you qualify for one of these exemptions and you have received a letter about losing your license, contact the DTF immediately or reach out to a tax attorney for help.
Can I get my license back if I drive for work?
The rules state that you can get an exemption from losing your license if you have a commercial driving license. The rules do not offer that same exemption for other taxpayers who may drive for work, including certain delivery drivers or rideshare drivers.
In this situation, you should reach out to the DTF and explain how keeping your license will allow you to work and thus help you pay off your tax debt. However, the Department may require you to set up a payment plan or apply for a hardship exemption to keep your license active.
How can the DTF legally take away my license?
Driving licenses are a privilege granted by the state. If you owe the state money in the form of unpaid taxes, the state has the right to rescind those privileges. This right is outlined in New York Tax Law Section 171-v.
That said, as explained throughout this post, the state will reinstate your driving privileges if you can prove that you drive commercially for work, are experiencing hardship due to the revocation, or make payment arrangements with the state.
Can New York State take away my out-of-state license?
New York State cannot revoke a driving license issued in another state, but the state can revoke your privilege to drive in this state. If you are caught driving in New York after your driving privileges have been revoked, you will face the same penalties as someone driving with a suspended or revoked license. Unfortunately, that’s true even if your license is valid in another state.
Can I get my license back if the tax debt expires?
Once the tax debt expires, the state cannot take steps to collect it involuntarily, and for that reason, the state cannot rescind a license related to expired tax debt. However, in New York State, tax debt takes 20 years to expire.
If the license revocation was related to an expired tax debt, contact the DTF to explain the error as soon as possible. Waiting for the debt to expire after the DMV revokes your license is impractical.
How do I get my driving license back?
In addition to meeting the DTF’s terms for license reinstatement, you may also have to meet the DMV’s criteria. Often, you can simply fill out some forms to get your privileges back, but depending on how long your license was revoked and whether or not it expired during that time, you may be required to take the written or driving test again.
What else can happen if I don’t pay my tax debt?
Taking away your driving privileges is just one collection tactic used by the DTF when taxpayers don’t pay. The agency may also seize your bank accounts and other assets, including your home in some cases. However, it’s important to note that the agency cannot take away your driving privileges and garnish your wages for the same tax debt.
Get Help With Unpaid Taxes in New York
Dealing with unpaid taxes can be stressful, but a tax attorney experienced with New York tax laws can help you navigate the situation and find the best outcome possible. At the Law Offices of Stephen Kass, we have worked extensively with individuals and businesses based in New York, with nexus in New York, and with New York-sourced income.
If you’re struggling with unpaid taxes, dealing with an unwanted state tax assessment, or facing a residency audit that may lead to a New York tax liability, contact us for assistance. We can help you with every stage of the process from assessment through collections, and we can help you make a plan for future compliance.
Don’t risk losing your driving privileges or your financial assets. Instead, reach out to us for a free consultation about your options today. We can also help with IRS tax problems as well as tax issues related to other state revenue agencies.
