Tax Law Suspending Drivers Licenses Can Punish Poor New Yorkers
TUESDAY, SEPTEMBER 06, 2016

An NBC New York I-Team report highlighted the difficult situation that can be created for low-income New Yorkers by a state law, which suspends drivers licenses once back taxes, interest and penalties surpass a $10,000 threshold. Daniel Hsiung, a Staff Attorney in the Harlem Community Law Office, was interviewed and effectively presented the predicament created by the law in the core of the story.

The report delves into the suspended license and reinstatement efforts of one man who has been unable to return to work after a double hip replacement and has been relying on his Social Security disability income. The man, Ismael Ortiz, owes New York State more than $17,000 between back taxes, interest and penalties. The law at issue permits license suspension for people owing more than $10,000 unless there is agreement to a payment plan. Ortiz would like to correct the matter, but his attorney noted if Ortiz entered a payment plan under the circumstances, he would not have money for other expenses.

Hsiung, who has represented clients like Ortiz, gave a broad perspective on the law and its consequences. He called it “kind of a punishment for being poor” and added, “The illogical nature of this: you’re taking away a property right which is the very right that can help you reach your stated goal, which is to get people to pay their taxes.” Hsiung also said “There should be another procedure in place besides the complicated offer in compromise for them to demonstrate they are in financial hardship.”

Hsiung’s comments were incorporated in a teaser throughout the news program’s broadcast in order to keep viewers watching.




NBC New York
I-Team: Critics Call Foul Over Tax Law That Suspends Licenses
By Pei-Sze Cheng
September 2, 2016

Brooklyn resident Ismael Ortiz is one of many New Yorkers was stunned to find his license had been suspended because he owed taxes to the state.

The Williamsburg resident owes more than $17,000 in back taxes and has no way to get around to start paying back the taxes he owes in part because of a state law that the New York Bar Association has called “bad policy.”

“The only way for him to get out of this suspension is to enter into a payment plan,” said Tamara DelCarmen, an attorney working with Ortiz. “But he just can't do that, he has no extra money to pay for anything."

DelCarmen works for Brooklyn Legal Services and has been trying to get Ortiz’s driver's license back. She told the I-Team that because the man a double hip replacement, he hasn’t been able to return to work as a respiratory therapist and therefore can't earn income.

Ortiz has been living on his Social Security disability income of $1,847.50 a month. He’s afraid he’ll never be able to pay the government back, or to get his driver’s license reinstated.

Ortiz initially owed $6,694 in taxes in 2004, 2005, 2006 and 2007. But interest and penalties was applied to that amount, making the total bill balloon up to $17,199. That amount crosses a state threshold of $10,000 in taxes and penalties for the DMV to suspend a driver’s license unless a debtor agrees to a payment plan.

New York State touts the huge success of the program, as total recovered revenue since 2014 tops $438 million.

But a report by the New York State Bar Association called the regulation “bad policy” that mounts to an “inappropriate and disproportionately harsh punishment.” The state Taxation Department said it has seen that report and is reviewing it.

Daniel Hsiung, an attorney for Legal Aid -- which has also helped clients like Ortiz -- said that the regulation is “kind of a punishment for being poor.”

“The illogical nature of this: you’re taking away a property right which is the very right that can help you reach your stated goal, which is to get people to pay their taxes,” said Hsiung.

If Ortiz finds a part-time job, he will need a car to take him to his assignments which can take him across all five boroughs.

If he can come up with $75, he can purchase a restricted license, that will allow him to drive to work and doctor visits. But will not allow him to drive to the grocery store, the Laundromat, or to drive his parents to their appointments with physicians.

“There should be another procedure in place besides the complicated offer in compromise for them to demonstrate they are in financial hardship,” said Hsiung.

Ortiz says he doesn't have the money to pay for the restricted license so for now he is letting Brooklyn Legal Services help him fight the suspension.

“I would like to correct the problem,” said Ortiz. “But if they restrict my license there's no way I can resolve the problem.