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Unpaid taxes: driver's license suspension as a consequence?

When thinking about the consequences of failure to pay taxes, it is only natural to focus on the role of the IRS. After all, the IRS can seek to impose hefty tax penalties against taxpayers who don't pay up on time or work out an installment agreement or offer in compromise.

The IRS also has a Criminal Investigation division that pursues money laundering and other possible criminal activities besides tax evasion. And of course the Florida Department of Revenue and other state revenue authorities have their own penalties and possible consequences for unpaid state taxes.

But is it really possible that a state would suspend someone's driver's license because of tax debt?

The answer, unfortunately, is yes. New York is developing a program to suspend the driver's licenses of people with tax debt of $10,000 or more. 

The program would not apply if the appeals process is still ongoing. But the governor of New York, Andrew Cuomo, said he was putting "tax scofflaws" on notice that their licenses could be suspended. 

Critics immediately the questioned the fairness of such a procedure - and its logic. After all, how is someone supposed to get to work to make the money to pay back tax debt with a suspended driver's license?

From the state's perspective, however, the threat of license suspension may be preferable to tax liens, wage garnishment and other procedures that require numerous formal steps to execute. Threatening the loss of a driver's license may be heavy-handed, but it gets people's attention.

Source: CNN Money, "Behind on your taxes? You may lose your driver's license," Jeanne Sahadi, August 21, 2013

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