Gov. Andrew Cuomo’s $136 billion budget plan proposes several actions to increase tax enforcement, and he estimates it would bring in an additional $47 million in tax revenues during the 2013-2014 fiscal year, which starts April 1.
The changes, which would require approval by the Legislature, include creating a new program to suspend driver’s licenses of people who have past-due tax liabilities of more than $10,000. A past-due tax liability is one that is final and the taxpayer no longer has a right to administrative or judicial review. The program would be modeled after one created 18 years ago in which the state suspends driver’s licenses to force people to pay child support.
“This bill is not intended to deny taxpayers the ability to work, pursue educational opportunities or seek medical treatment for themselves or the members of their household,” according to the governor’s memo in support of the legislation. “For this reason, a person whose license is suspended as a part of this program may apply for a restricted use license pursuant to the provisions of the Vehicle and Traffic Law. If the only issue leading to the suspension is the taxpayer’s unpaid tax liabilities, the Department of Motor Vehicles will be required to issue a restricted use license.”
The program would raise $26 million in the 2013-14 fiscal year and $6 million annually after that. The suspension would be lifted after the driver paid the taxes or entered into a payment agreement. Since a restricted license is not available to drive a commercial vehicle, commercial driver’s licenses would be excluded from the program so taxpayers could still earn a living, the memo said.
The governor also wants to give the state Department of Taxation and Finance the authority to garnish wages of delinquent taxpayers without having to file a warrant with the Department of State or County Clerk. The current requirement that a warrant be filed with a county can be “unnecessarily harsh” since the warrant stays on a person’s credit report for seven years, even if the back taxes have been paid. The legislation would raise $10 million annually.
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