If you have unpaid taxes, you probably already know that the state of Maryland may add fees and interest to your debt. But if you couldn’t afford to pay the tax liability in the first place, you might be tempted to shrug your shoulders and say, “Oh well.”
This is why the Comptroller of Maryland may use another technique to persuade you to pay back your debt. The state can withhold your driver’s license or vehicle registration until you address your unpaid debt. Many people rely on vehicles for transportation for work or school, so losing their driver’s license can have a devastating impact.
Businesses can also feel this impact, since unpaid debt may interfere with vehicle registration renewal for any vehicles owned by the business. This can be caused by unpaid unemployment insurance contributions, unpaid business taxes, and more.
If you’ve received notice that the state has placed a hold on your driver’s license or registration, you should call a tax attorney like S.H. Block Tax Services to find out what your options are. Our firm has experience with resolving tax debt and can help you get back on the road.
Why Do I Have a Hold on My License?
The Motor Vehicle Administration (MVA) and the Comptroller of Maryland are two different entities, so why does your outstanding tax obligation affect your ability to hold a driver’s license?
Organizations that issue state licenses—including professional licenses—send a list of the licenses that are up for renewal to the Comptroller’s office. If there are any names on the list that have unpaid tax debt, the Comptroller can instruct the organization to withhold the license.
Often this affects driver’s licenses, but it can also include professional licenses used in the medical, realty, law, food service, and other business fields.
They do this to create extra incentive to pay back outstanding tax debt. Bills and notices may not have much impact on someone with unpaid tax liability, but an impact to their livelihood can make a big difference.
How Does this Affect Businesses?
If your business has outstanding unpaid taxes, you may have received notice that there is a hold on your vehicle registration renewal, or a hold on the renewal of your professional license. This can quite literally put a freeze on your income if you are required to have a license to legally work in your field.
Unpaid sales and use tax, corporate income tax, withholding tax, motor carrier tax, etc. can all result in a registration hold. Unpaid unemployment insurance contributions can also count as outstanding taxes.
Whether you are a business or an individual, the process for getting a hold release is the same.
How to Get a License Hold Release
If you’ve received notice that Maryland has put a hold on the renewal of your driver’s license or vehicle registration, you are probably wondering how to fix this! There are three ways to get a release on your license hold:
- Pay your outstanding state tax liabilities: If you cannot pay your debt in full, you can arrange a payment plan with the comptroller. You will often need to submit a down payment (likely to be 10% of your total debt) and then pay the remaining balance over a 36-month payment plan. The hold should be released within 2 business days of your initial payment.
- Negotiate your debt: If you cannot pay your debt, even with an approved payment plan, then you may qualify for an Offer in Compromise. This can reduce your overall debt into a manageable sum.
- Dispute your debt: If you believe the hold has been placed in error, or you do not agree with the state’s assessment of tax debts, you can dispute the hold. You will need to provide documentation to prove the error.
You do not necessarily need professional help to take these actions. You may be tempted to consult your favorite accountant, but you can often get a better or faster outcome by working with a tax attorney who is familiar with these holds.
S.H. Block deals with situations like this on a regular basis. Our firm can help you figure out the best course of action, so that you don’t waste your time researching solutions that are not likely to work for you long term. We will be right by your side, working to help you understand your options. Our team will recommend the solution that is likely to serve you the best.
Having an experienced tax attorney on your side means that you have an insider’s insight. Our experience tells us whether you’re a good candidate for an Offer in Compromise, how to negotiate successfully (including potentially waiving your down payment!), and what kind of documentation is required to dispute your tax liability.
Because we know how challenging it is to have a tax burden turn into a driver’s license hold, we are compassionate towards our clients. We want to help you successfully overcome this challenge.
RELATED: What Can Maryland Do If I Owe Taxes?
Don’t Risk Losing Your Driver’s License or Vehicle Registration – Call S.H. Block Today
At S.H. Block Tax Services, we understand that losing your license can put your livelihood at risk. The sooner we start working toward a solution, the more likely it is that we can solve it before you need to renew. We believe in advocating for taxpayers’ rights, which is why we’ll do everything we can to help you get back in good standing with the state of Maryland as well as the federal government.
Don’t let your tax liability snowball into a major problem. Take advantage of our free consultation, where you can tell us the details of your tax problem and one of our tax attorneys can discuss potential solutions and give you an idea of what to expect from the process. Get started today by calling (410) 793-1231 or filling out our online contact form.
The content provided here is for informational purposes only and should not be construed as legal advice on any subject.