New York state law contains a provision that allows the state to suspend the driver’s license of a New York citizen in order to enforce the payment of delinquent tax liabilities which total $10,000 or more, and for which the taxpayer no longer has any right to administrative or judicial review. The statute also provides that the taxpayer receive notice by mail of his or her inclusion in the license suspension program (Program) at least 60 days prior to the suspension taking effect. The notice informs taxpayers that they can avoid license suspension by fully satisfying the tax debt or making arrangements to do so.
Once an individual is notified that he or she is in the Program, that taxpayer has no right to legal recourse against the Department of Taxation and Finance or the Department of Motor Vehicles. Even so, there are certain grounds on which a taxpayer can protest his or her impending license suspension.
In a recent case, a taxpayer did just that, on the argument that the individual to whom the notice was provided was not the taxpayer at issue. The Division of Taxation sent the taxpayer, Gretchen A. Stranahan (Stranahan), a Notice of Proposed Driver License Suspension Referral. The notice contained all the necessary information, including that she had 60 days to respond, and that she owed $122,406.50 from various tax periods in 2008, 2009, and 2010.
In Stranahan’s protest, she informed the Division of Tax Appeals that it was her husband, the principal officer, manager, and operator of American Tree Co., Inc., who owed the back taxes for various liabilities incurred by American Tree Co., Inc. She argued that she, as the individual who received the notice, was not the taxpayer at issue, so the suspension of her driver’s license as a penalty for another driver’s failure to pay his tax obligations was unreasonable, unconscionable, and unconstitutional.
The court disagreed because Stranahan had not previously established that she was not the taxpayer to which the notice applied, which is how the court construed the plain meaning of the statutory language, “the individual to whom the notice was provided is not the taxpayer at issue.” The court also reasoned that Stranahan had previous opportunities to challenge the merits of the underlying notices, and failed to do so, resulting in the liabilities becoming fixed and final.
Put simply, the court concluded that Stranahan was “the person named in the notice and to whom the notice was provided, regardless of her actual liability for the underlying tax assessments.” The court dismissed her constitutional claim, stating that it lacked the authority to address it.