New York State has been going after tax evaders under an aggressive new tax collection program, suspending the driver’s licenses of 8,900 New Yorkers who failed to pay their state taxes and collecting over $56 million, 34 percent more than had been projected.
The crackdown is the result of legislation signed into law last year by Governor Andrew Cuomo, aimed at spurring individuals who owe more than $10,000 in back taxes to settle their tax bill with the Department of Taxation and Finance (see New York to Suspend Driver's Licenses of Tax Delinquents).
"We are sending a clear message to tax delinquents that they either have to pay the taxes they owe, or face real consequences," Cuomo said in a statement. "For many, this message is getting through and as a result thousands of people have come forward to do the right thing and find a way to pay their taxes. Those who haven't are losing their drivers licenses."
In the first round of notifications, more than 17,700 drivers were contacted beginning in August 2013. Along with 8,900 suspensions, 6,500 tax debtors have either paid in full or are making payments on their debt, while 2,300 were determined to be ineligible for suspension.
As a result of the program, tax collections increased nearly $56.4 million on a state and local basis, a 34 percent increase over the initial estimate of $42 million. The program will continue to raise millions of dollars annually as thousands of other debtors are notified and, ultimately, resolve their debt.
“Driver licenses are a privilege, not a right, and this program has prompted unprecedented action from tax delinquents who were otherwise ignoring their debt,” said Commissioner Thomas H. Mattox of New York State’s Department of Taxation and Finance. “Thousands have contacted us to do the right thing —pay their tax bills in full, or work with us to arrange a payment plan that satisfies the debt. Those who continued to ignore their debt have had their licenses suspended.”
When a driver gets a license suspension notice from the state tax department, they have 60 days from the mailing date to arrange payment. If the taxpayer fails to do so, the Department of Motor Vehicles sends a second letter providing an additional 15 days to respond. If the delinquent taxpayer again fails to make contact, the DMV is authorized to suspend the license until the debt is paid or a payment plan is arranged.
A taxpayer who drives with a suspension in effect is subject to arrest and penalties. Those with a suspended license can apply for a restricted license that allows them to drive to work and return directly home, however.
In New York State, 96 percent of taxes are paid by businesses and individuals who voluntarily meet their tax responsibilities, the tax department pointed out. The remaining four percent is collected through the tax department's audit, collections and criminal investigations programs. Through enforcement programs, such as suspension of driver licenses, the department said it ensures fair tax administration for all New Yorkers.