A Maryland tax debt can affect more than your bank account. If you have unpaid state taxes, the Comptroller of Maryland may place a hold that prevents you from renewing a driver’s license, vehicle registration, or professional license.
For someone who depends on a license to work or needs a vehicle to get to work, a hold can create an immediate problem. You may be unable to renew your tags, maintain your professional credentials, or continue working if your license expires before the issue is resolved.
Gabaie & Associates, LLC helps individuals and businesses address Maryland tax debts and work toward the release of license and registration holds. The firm can communicate with the Comptroller, review the underlying tax problem, and help pursue a payment arrangement or other resolution when appropriate.
Call 410-358-1300 or contact the firm to discuss a Maryland license or tags hold.
What Is a Maryland License or Tags Hold?
A license or tags hold is a collection measure that can prevent you from renewing certain licenses or vehicle registrations when you have an unresolved state tax obligation.
The Comptroller can notify the agency responsible for your license or registration when you have delinquent, undisputed taxes or other qualifying obligations. The licensing agency may then delay renewal until the Comptroller confirms that the debt has been paid or that you have made satisfactory arrangements to resolve it.
This can affect several types of licenses and registrations.
A hold may involve:
- A Maryland driver’s license
- Vehicle registration or tags
- A professional or occupational license
- A business-related license
- Certain permits or certificates
The exact requirements depend on the type of license involved. For example, Maryland health occupation boards generally must verify that an applicant has paid undisputed taxes and unemployment insurance contributions, or has made satisfactory arrangements for payment, before renewing a license.
A vehicle registration hold works somewhat differently. The Maryland Motor Vehicle Administration (MVA) can place a flag on a vehicle record based on information from another government agency. The flag must generally be resolved before certain registration or title transactions can be completed.
Why Did Maryland Put a Hold on My License?
In many cases, the hold is connected to an unpaid state tax balance. That does not necessarily mean the amount listed by the state is correct.
A hold may result from issues such as:
- Unpaid Maryland income taxes
- Unfiled state tax returns
- An outstanding tax assessment
- Unpaid business taxes
- Sales and use tax problems
- A tax balance that resulted from an audit
- Disputed residency or filing issues
- Unemployment insurance contributions in certain circumstances
Before trying to resolve the hold, it is worth determining why the Comptroller says you owe the money.
For example, if the state assessed additional income tax because it believes you were a Maryland resident, but you actually lived elsewhere, simply agreeing to a payment plan may not address the underlying problem. A Maryland residency dispute may need to be addressed first.
Likewise, if the balance resulted from an audit that you believe was incorrect, you may have options for challenging the assessment. Gabaie & Associates, LLC helps taxpayers respond to Maryland tax audits and pursue appeals when appropriate.
Can a Tax Debt Stop Me From Renewing My Driver’s License?
Yes. An unresolved state tax debt can interfere with renewing your driver’s license. When the Comptroller identifies a qualifying delinquency, the licensing agency may place a hold on renewal until the debt is paid or satisfactory payment arrangements are made.
This can create serious problems if you need your license for work or other daily responsibilities. If you receive a tax deficiency notice, address it before your license expires so there is time to resolve the hold.
What Is a Maryland Vehicle Registration or Tags Hold?
A vehicle registration hold, sometimes called a tags hold or vehicle flag, can prevent you from completing certain transactions with the MVA.
The MVA may place a flag on a vehicle record because of an unresolved issue. Tax-related flags can prevent registration renewal or other transactions until the issue is resolved.
Not every vehicle flag is tax-related, however. If your tags are on hold, first determine what caused the flag. If it resulted from a Maryland tax obligation, resolving the tax issue may be necessary before the registration transaction can move forward.
Can a Maryland Tax Hold Affect a Professional License?
Yes. A tax hold can interfere with renewal of certain professional licenses. Maryland health occupation boards, for example, may require taxpayers to pay undisputed taxes and unemployment insurance contributions or make satisfactory payment arrangements before renewing a license.
If the hold remains unresolved and your license expires, you may be unable to practice your profession legally. Addressing the tax issue before the renewal deadline can help prevent a lapse in your license.
How Do I Get a Maryland License or Tags Hold Released?
The steps to release a hold depend on why it was placed and whether you agree with the underlying tax debt.
If the tax balance is accurate and you can afford to resolve it, paying the amount due may allow the Comptroller to release the hold. If you cannot pay the full balance, you may be able to establish a payment arrangement that satisfies the state’s requirements.
The important point is that simply contacting the MVA or your professional licensing board may not resolve a tax-related hold. If the Comptroller placed the hold, the underlying tax issue generally needs to be addressed with the Comptroller.
Gabaie & Associates, LLC can review your account and help determine which approach makes sense based on your circumstances.
What If I Disagree With the Maryland Tax Debt?
You may have a different set of options if you believe the tax balance is wrong.
For example, you may disagree with the amount because of an incorrect tax assessment, a filing issue, a residency dispute, or information the Comptroller has not considered. In that situation, paying the balance simply to remove the hold may not be the best approach.
The first step is to identify how the balance was calculated and whether you have an opportunity to challenge it.
Gabaie & Associates, LLC can review the state’s assessment and available tax records to determine whether there may be grounds to dispute the liability. The firm also assists with Maryland tax appeals when a taxpayer disagrees with a state tax determination.
Addressing the underlying liability may be more effective than treating the license hold as a separate problem.
Can a Tax Attorney Help With a Professional License Hold?
Yes. A tax attorney can address the tax problem that is causing the hold and communicate with the Comptroller on your behalf.
Gabaie & Associates, LLC can review your tax history, notices, assessments, and financial circumstances to determine what may be causing the hold. Depending on the situation, the firm may help you:
- Challenge an incorrect tax assessment
- Address unfiled or delinquent tax returns
- Negotiate a payment arrangement
- Evaluate an Offer in Compromise
- Respond to state tax collection activity
- Work toward the release of a license or registration hold
The goal is not simply to get the hold removed temporarily. It is to address the tax issue behind it and find a resolution you can realistically maintain.
Maryland License and Tags Hold FAQs
How do I know why my license or tags are on hold?
The notice or information provided by the Comptroller, MVA, or licensing agency should identify the reason for the hold. If the reason is unclear, you may need to contact the agency that placed the hold or obtain additional information about the underlying tax account.
Can I renew my vehicle registration if I owe Maryland taxes?
A tax-related vehicle flag can prevent certain MVA transactions until the underlying issue has been resolved or satisfactory payment arrangements have been made. The specific requirements depend on the type of flag and transaction.
Can I lose my professional license because of unpaid taxes?
A tax delinquency can interfere with professional license renewal in certain regulated occupations. If you receive notice of a tax-related hold, address it before your current license expires whenever possible.
Do I have to pay my entire tax debt to remove a hold?
Not necessarily. Depending on the circumstances, an accepted payment arrangement or another resolution may satisfy the requirements for releasing the hold.
What if the tax debt is wrong?
Do not assume that you have to pay an incorrect assessment simply because it is preventing you from renewing a license or registration. You may have options to challenge the liability or request a review of the state’s determination.
Get Help With a Maryland License or Tags Hold
A Maryland tax problem can follow you into places you may not expect, including your driver’s license, vehicle registration, or professional credentials. If a tax-related hold is keeping you from renewing a license or tags, addressing the underlying tax issue may be the key to getting the hold released.
Gabaie & Associates, LLC helps taxpayers deal with Maryland tax assessments, collection problems, payment arrangements, and other state tax issues that can affect their licenses and registrations.
Do not wait until your license expires or you are unable to complete an important MVA transaction. The sooner you understand why the hold was placed, the sooner you can determine what options may be available.
Call (410) 358-1500 or contact the firm online to discuss your Maryland license, tags, or professional license hold.
