Dec. 15, 2016 11:21 AM

Those with unpaid income taxes can continue working.

In my April column, “Making the Case for Hardship,” I lamented Louisiana’s hard line policy allowing the Louisiana Department of Revenue to suspend the driver’s licenses of taxpayers who have unpaid tax bills. I specifically pointed out the Legislature’s failure to provide for a type of “hardship” license that would allow taxpayers to continue working and contributing to the state’s economy while they remedy their income tax woes.

I’m happy to say it appears that someone was listening. Effective Aug. 1, the Legislature amended La. R.S. 32:414(R) (3) to allow the Office of Motor Vehicles to issue economic hardship licenses to applicants whose licenses have been suspended or not renewed because of unpaid income taxes. This economic hardship driver’s license is valid for one year or until the individual pays or makes arrangements to pay the overdue income taxes, whichever occurs first.

We have been working with several clients over the past several weeks to figure out the mechanics for obtaining the hardship license. Here are a few tips we have put together based on our work so far:

Visit the local DMV, not LDR. The statute authorizes the DMV, not LDR, to issue the hardship license. Requests may be made at any local DMV office, so you do not have to travel to Baton Rouge.

Bring money. A reinstatement fee is required. We have contradictory information from clients on the amount of the fee for the hardship license. Based on our experience, it ranges anywhere from $50 to $80.

We are investigating the inconsistencies with LDR, but do not have clear answers yet. We suspect that they are due to transaction fees associated with different payment methods or from fees associated with “expired” license status versus “suspended” license status. In recent months, the DMV has gone back and forth on the types of payment methods it will accept. In November, it issued a statement that it would no longer accept cash; however, it has recently shifted its position and now says it will accept cash payments for some transactions. For now, we suggest bringing alternative forms of payment to avoid any issues.

Proof of insurance is required. Proof of current liability insurance is required.

Be prepared to prove it exists. Recently, we have had clients tell us he had gone to the DMV and after several hours of waiting was told by DMV employees that they are unaware of this type of hardship license. As a result, we suggest that you bring a copy of LDR Policy Services Division Revenue Information Bulletin No. 16-041, which can be found at www.rev.state.la.us.com.

Remember it’s a “hardship” license.

The hardship license only allows for to travel to and from work and on necessary errands. We suggest refraining from driving for other reasons as it may jeopardize the validity of the license. (See DMV Policy & Procedure: Hardship License Requirements Section II: Driver’s License Laws Number 30, which provides “the license allows the applicant to drive during the period of suspension to earn a livelihood or to maintain the necessities of life.”) It does not apply to CDLs. The provision only applies to personal driver’s licenses.

Income taxes only. The hardship licenses is only available to taxpayers with overdue income taxes. It is not available to individuals who owe other types of taxes.

No devices required. There are no ignition interlock or other monitoring devices required.

Keep in mind that this hardship license is only going to be valid for one year. During that time, we suggest that the taxpayer use the opportunity to achieve long-term solutions for resolving the tax issues. Since LDR’s resolution options are very limited, these will most likely include making payments toward the overdue tax bill to get it paid over the 12 months and/ or getting into a monthly payment plan with LDR for any leftover balance.

Angela Bryson co-founded Lafayette-based Bryson Law Firm LLC with her husband Cary in 2001. The firm, which also has offices in Baton Rouge and Shreveport, focuses 100 percent of its practice on IRS and Louisiana tax resolution, employing a team of attorneys, CPAs and former IRS agents as part of its professional staff.

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