Can Your Driver’s License be Suspended for Taxes?

Some states will suspend your driver’s license if you owe a certain amount of taxes. The IRS does not.

This post is provided for general information only. Please confirm the details and circumstances of your unique situation with your tax accountant or other appropriate advisor before taking action.

Can the IRS suspend your driver’s license?

The IRS cannot spend your driver’s license or professional license.

These licenses are issued by states. The IRS is a federal government agency. It has no authority to suspend a license issued by a state or tell a state to suspend your license.

According to the IRS website, telling you the IRS will suspend your driver’s license is a scare tactic used by scammers. Think twice before using any company that tells you you could lose your driver’s license because of IRS debt.

Why does the IRS ask for your driver’s license?

The IRS may ask for your driver’s license as a security measure such as when you file your tax return. This is to help confirm your identity.

Giving the IRS your driver’s license information does not mean they can suspend your license. If you don’t give your driver’s license information or the IRS can’t match it, you may need to complete extra verification steps.

Can a state tax authority suspend your driver’s license for state taxes?

Some states have laws that you can lose your driver’s license for unpaid state taxes. These laws are generally valid.

In most states with these laws, you need to owe a certain amount of taxes for a certain amount of time to have your license suspended. Examples include:

The process varies by state. In some states, the suspension is automatic.

In other states, you’re asked to show the reason you haven’t paid and why your license shouldn’t be suspended.

How can you keep your license if you can’t pay your state taxes?

If you can’t pay your state taxes, you may have several options to avoid having your driver’s license suspended. This will vary based on what state you’re in.

  • Entering into a payment plan
  • Paying enough to get below the minimum debt for a license suspension
  • Requesting limited driving privileges such as to work
  • Showing proof of a financial hardship

What should you do if you lose your driver’s license because of taxes?

If you lose your driver’s license because of taxes, remember that it’s often illegal to drive while your license is suspended. Even if you need to work, continuing to drive could risk criminal charges.

You will generally need to make arrangements to pay your state tax debt. You may also be able to get your license reinstated based on a hardship even if you can’t pay.

You typically need to contact both the state tax authority and the DMV. Even after you pay your taxes in full, you may need to fill out a form with the DMV to show proof that you paid and have your license reinstated.

Don’t start driving again until you have confirmation that your license is reinstated.

Where do you go for help?

If you agree that you need to pay your taxes and are able to do so, you can contact the state tax authority directly and then the DMV.

If you want to challenge your tax debt or need help with payment options, contact a tax accountant.

If you believe your license was wrongfully suspended, are having problems with the reinstatement process, or were cited for driving on a suspended license, contact a traffic lawyer.

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