NYS Back Taxes – Your Driver’s License Can Be Suspended [and More ]

If you owe NYS back taxes, the Department of Taxation and Finance may suspend your driver’s license, and more. 

This article addresses some the common enforcement tactics used by the NY Tax Department.

Tax problems only get worse with time. Interest and penalties [ compound daily].

Take the first step and contact us to help you put your tax problems behind you. We can assist you regardless of location. 

NY Driver’s License Suspension Program

The New York Driver’s Suspension Program enacted by Governor Cuomo has been very successful in getting taxpayers who owe NYS back taxes back into compliance. 

Most New Yorkers need to drive  to go to work;  shop for groceries; go to the doctor; and bring their children to their activities.

Because of the great need for a NY driver’s license, the New York Driver’s Suspension Program as it relates to back taxes has been heavily used by the NYS Tax Department as an enforcement technique.

If you owe $10,000 or more in NYS back taxes, the Tax Department is permitted by law to recommend the suspension of your driver’s license.

Before New York State recommends the suspension of your driver’s license, you will receive a Notice of Proposed Driver’s License from the NYS Tax Department.

The Notice of Proposed Driver’s License Suspension will give you 60 days to resolve your tax liability.

If you do not resolve your back taxes with the New York State Department of Taxation and Finance within 60 days, the Tax Department will notify the Department of Motor Vehicles of your tax delinquency and advise them to suspend your driver’s license.

You will then receive a notice from the Department of Motor Vehicles that you have 15 days to resolve your tax liabilities if you want to avoid the suspension of your driver’s license. 

Please be forewarned that if you drive with a suspended license, you may be subject to arrest.

New York Tax Warrant 

If you own real estate, it will attach to the property. As such, purchasing or refinancing a property may be an issue.

New York State does not have to go to Court to issue a tax warrant or for that matter pursue any of the other back tax collection remedies.

Bank Levy

The New York State Department of Taxation and Finance can levy your bank account(s) up to the amount of your NYS back taxes.

For example, if you owe $12,000 in back taxes and you have $15,000 in your bank account, you can suddenly wake up with a balance of $3000.

It will be very difficult to get this money back and it will be applied to your back tax liability.

It is difficult to pay rent, mortgage, or other bills when you are subject to bank levies. 

Bank levies are not only subject to individuals but businesses as well. 

Business bank accounts, credit card processing, etc are all subject to collections if you owe NYS back taxes.

Wage Garnishment

If a Driver’s License Suspension or bank levy does not bring you to the table, NYS will garnish 10% of your wages.

The wage garnishment does not apply if you are self employed.

If you are self employed, NYS may find out how you obtain your self employment income. 

NYS will then levy the entire amount of your self employment income up to the amount of the back tax liability.

For example, if you are a salesperson, you are typically issued a commission on an IRS 1099 form. 

The taxing authority will determine the source of your self employment income and then levy your commission check. 

This occurs commonly with self employed professionals such as real estate brokers and agents. 

New York State has access to your banking as well as your employment so bank levies and wage garnishments are the low hanging fruit of enforcement action against you.

Assignment of NYS Tax Agent

In certain instances, such as high dollar income or sales tax matters, the New York Tax Department has field agents that will visit you at your home or place of business. 

The job of the NYS tax agent is to enforce collection of your back tax liability. 

The NYS tax agent can also refer your matter to the criminal investigation division for review if your tax matter rises to possible criminal liability.

Here are two examples that may result in the assignment of a New York agent:

The failure to file income tax returns is a crime ( federal and NYS). 

The failure to file and/or remit New York sales tax is a crime. 

If you fall into either of those examples, it would be prudent to hire experienced  New York tax attorney Charles Rosselli to help you navigate the maze of getting back into compliance . 

Please note that all conversations between you and an accountant are not subject to attorney client privilege.

Seizure of Assets 

One of the more extreme collection tools  in the New York Tax Department is the seizure of assets.

Asset seizure will be employed typically by NYS Tax Agents (see above) in business tax matters, such as sales tax.

Asset seizure can also be used for personal income tax matters.

Typically, once a case is assigned to a NY Tax Agent for enforcement, the Agent will visit the individual at either their home or place of business. 

If a Tax Agent cannot reach an agreement with the taxpayer or if their request for enforcement is ignored, the NYS Tax Department will visit the taxpayer’s place of residence or business and do what is called a “ pre - seizure visit.” 

The Agent will likely advise you that your property or asset is subject to seizure within 30 days and you may receive a letter from the New York Tax Department regarding their intent to seize the property and/or business.

The NYS Tax Agent will appear on the date of seizure typically with the sheriff and/or local police and padlock the business, property, etc. 

If you have vehicles, the vehicles will be seized.

You will also receive two  letters from the NYS Tax Department regarding the NYS asset seizure.

The  “Statement to Taxpayer Upon Seizure” letter will state that NYS has seized your property subject to a New York State tax warrant and applicable statutory additions to tax.

The letter will advise you that NYS will inventory your property ;sell it at public auction; and then apply the net proceeds to the back tax liability, unless you redeem the property

The “Tax Compliance Agents Sale” letter will state the date that your assets will be auctioned and the location of the auction.

Solving Your Tax Problem [ the first step ]

As you may be aware, the New York Tax Department is very aggressive when it comes to the enforcement of past due taxes.

Whether you haven’t filed your tax returns in years or owe back taxes,  NY tax attorney Charles Rosselli  can help. We can assist you regardless of location.

The first step is determining the best course of action  to solve your tax problem as there is no cookie cutter solution to your NYS back taxes.