Maryland is Hitting the Brakes on Delinquent Taxpayers

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On June 1, 2011, the State of Maryland puts the brakes on drivers with outstanding tax liabilities. This means both the individual driver and businesses—so be alert!

The Motor Vehicle Administration (MVA) will begin assisting the Comptroller of Maryland and the Department of Labor, Licensing and Regulation (DLLR) in collecting outstanding taxes and unpaid unemployment insurance contributions by holding the driving privileges and/or vehicle registration renewals of non-compliers. Everyone affected must first satisfy their Maryland liabilities, either in part or in full before the hold is released. Taxpayers currently making payments under an approved payment plan should not be affected by the new rule.

Although the program begins next week, guidance on its enforcement is beginning to trickle out. The highlights of the program include the following:

  1. Ideally you will be notified by the MVA between 60 and 90 days prior to a license or tag renewal to alert you to the fact that nothing will be processed until the outstanding tax issue is resolved.

  2. Upon receiving the notice, you must contact the Comptroller's office to resolve this matter immediately. As of right now it is unclear how the Comptroller will handle those cases where the liability is in dispute and/or the taxpayer wants to request a waiver of any applicable penalty and interest.

  3. Once the Comptroller accepts either full-payment or an alternative arrangement will it notify the MVA that the hold can be withdrawn. The Comptroller's office is estimating that the hold-release process will take at least 2 days after payment is made.

Because this new plan is likely to affect so many of us, it will probably result in long delays for renewals. Therefore, it is best to be vigilant in attempting to work with the State well before your renewal date is close.

Should you fail to obtain proper clearance from the Comptroller and continue to drive on your expired license, the penalties are steep. In such event you could be assessed 12 points on your license which would result in an automatic 2 – 90 day revocation and suspension of driving privileges.

If you find yourself facing the prospect of losing your driving privileges because of an outstanding tax liability, we would be happy to help you navigate the Comptroller's process to get you back in compliance and back on the road.

By: Chaya Kundra, Esq.