The Richmond Register

July 22, 2013

Concerns over delinquent taxpayer collection measures addressed

By Ronnie Ellis
CNHI News Service

FRANKFORT — Delinquent Kentucky taxpayers will receive plenty of advance notice before their driver’s or professional licenses are suspended.

That’s what Revenue Department officials on Tuesday told lawmakers who feared quick suspensions of the licenses might actually make it harder for the taxpayer to pay up.

As part of a last-minute bill passed in the 2013 General Assembly to fund changes to the state employee retirement system, lawmakers also voted to allow the Department of Revenue to flag taxpayers who haven’t paid up and order the suspension of their driver’s or professional licenses.

But several lawmakers, including the co-chairmen of the Interim Joint Committee on Transportation, said they didn’t realize that provision was included in House Bill 440.

Sen. Ernie Harris, R-Crestwood, went so far at the June meeting of the committee to compare the provision to “the old debtor’s prison.”

But after Tammy Watts, Director of Collections for the Department of Revenue, on Monday laid out the step-by-step process to collect delinquent taxes before revoking licenses, Harris said:  “The detailed process calmed our fears.”

Well, not entirely.

Harris’ co-chairman, Rep. Hubert Collins, D-Wittensville, also had complained about the process in June. Monday, he said still wasn’t entirely satisfied.

Even with the efforts of the Revenue Department to notify delinquent taxpayers of the impending revocation, Collins asked: “If you suspend their licenses how are they supposed to do anything?”

Collins said many of those whose licenses are suspended will continue driving, but will do so without insurance which they can’t purchase without a license.

“I have a problem suspending a driver’s license because it can cause others pain if they’re out there driving without insurance,” Collins said.

But Watts told the committee it shouldn’t be a significant problem because few taxpayers are affected and even those who are affected are provided ample opportunity to avoid license suspension or revocation.

She said 95 percent of taxpayers pay on time and of the remaining 5 percent only about 11,000 remain delinquent. The measure in HB 440 applies only to those state taxes collected by the Department of Revenue and those who don’t pay on time are sent multiple letters and receive multiple phone calls.

Only if the taxpayer makes no effort to pay the taxes after that process, does the suspension process begin and even then, the taxpayer is given a 20-day advance notice before the actual suspension.

“At any time in the entire process,” Watts said, “if they contact the department we will work out a payment plan with them.”

She said 22 other states have some sort of license suspension to aid in the collection of state taxes.

Ronnie Ellis writes for CNHI News Service and is based in Frankfort. Reach him at rellis@cnhi.com. Follow CNHI News Service stories on Twitter at www.twitter.com/cnhifrankfort.