Provides for the adjustment of the minimum amount of tax delinquency for which the driver's license of a taxpayer may be suspended

• Democratic6

◆ The sponsor's argument

Why Liz Krueger says this is needed

Chapter 59 of the laws of 2013 law gave the New York State Department of Taxation and Finance a new and powerful enforcement tool for collection of delinquent New York State tax liabilities by authorizing the suspen- sion of a tax debtor's driver's license if arrangements are not made by the tax debtor to pay delinquent taxes. Any individual whose tax liabil- ity (inclusive of interest and penalties) is $10,000 or greater became subject to revocation of his or her driver's license, regardless of the financial condition of the taxpayer. These sanctions have been effective in getting tax debtors to pay delinquent taxes. However, these laws also have been widely criticized as being too harsh and punitive. In 2016, the Tax Section of the New York State Bar Association published Report No. 1344 on "New York State's Driver's License Suspension Program" (the "2016 Report"). That Report concluded that the driver's license suspension law is in conflict with longstanding debtor protection laws when applied to taxpayers who will experience financial hardship if required to enter into a payment agreement with the Department for the payment of their tax debts. For example, some tax debtors may have so little income or assets that they are not financially able to enter into an installment payment agreement or an Offer in Compromise to pay their tax liabilities without compromising their ability to pay basic living expenses. Nonetheless, the program can be used to force payments of tax debt from an indigent individual under threat of loss of his or her driver's license even though there are, in many cases, federal and state laws in place that would protect that individual from any direct tax levy on income and assets. The limited financial hardship exemptions make the New York law uniquely punitive when applied to this type of tax debtor since, unlike federal tax law, New York lacks many relief programs such as (1) the ability to place a tax debtor in "uncollectible" status if he/she can't afford to begin a payment plan or submit an Offer in Compromise without compromising his/her ability to pay basic living expenses or (2) the ability to enter into what are known as "partial payment" Installment Payment Agreements which set up a monthly payment plan that takes into account an allowance for the tax debtor's reasonable basic living expenses even though the plan may not ultimately fully pay the tax liability. The 2016 Report recommended that the law be amended (1) to include a financial hardship exemption; (2) to increase the threshold amount of tax debt (plus interest and penalties) that triggers application of the law; (3) to apply the law to any tax debtor, regardless of the amount of tax debt owed, if the tax debtor has engaged in egregious conduct to avoid collection, such as by hiding assets; and (4) to give more discretion to the Department of Taxation and Finance to waive license suspension based on the equities of a particular case. The 2016 report has proved to be a major catalyst for a broad scale effort to amend the law, particularly among groups representing indigent and financially compromised taxpayers. In 2017, the New York State Bar Association issued a follow-up report (Report No. 1380), to provide greater specificity with respect to the recommendations made in the 2016 Report, as well as to provide the stat- utory language necessary for the recommended amendments to the law. The 2017 Report made the following recommendations, inter alia: *An automatic exemption for low-income tax debtors who receive public assistance or supplemental security income or who have income below 135% of the level specified by the Federal Poverty Income Guidelines (currently $16,281 per year for a household of one). This conforms to the driver's license suspension hardship exemption provided under the New York State child support laws. A hardship exemption for any tax debtor who can demonstrate that payment of his or her past due tax liabilities wi

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.