Whether you are a doctor, attorney, contractor or a nurse, your professional license is your livelihood. When a tax issue arises, you might worry if the government can shut down your practice and take away your ability to work.
How does federal and state tax debt affect professional credentials?
Understanding the distinction between federal and state enforcement agencies when exploring these challenges is important. Here are some essential information concerning the factors that jeopardize professional licensing, including:
- The IRS cannot take your professional license: Federal law doesn’t give the IRS the authority to suspend state-issued occupational credentials. However, the IRS has the power to freeze your bank account, levy your income or revoke your U.S. passport for severe delinquent debts.
- California state agencies can suspend your license: Under California’s Delinquent Taxpayers Accountability Act, certain state agencies have the absolute power to target your license.
- Suspension from being in the “Top 500” list: The state updates a public list of top 500 taxpayers who owe more than $100,000 in state taxes twice a year. If your name ends up on the list, the state could suspend your professional license and even your driver’s license.
Once you receive a preliminary notice of suspension from the Department of Consumer Affairs, You have approximately 90 days to either satisfy the tax obligation or enter into a compliant installment payment plan. If the 90-day window closes without a resolution, your licensing board could place your credentials on hold, freezing your ability to legally work and earn an income in California.
Take control of your tax situation
Tax debts can be overwhelming and time consuming. If you are facing tax-related challenges, it is wise to seek the guidance of an experienced California law attorney as soon as possible. A legal professional can help you understand your rights and protect your peace of mind.