Taxpayers nationwide are generally well aware that the IRS has several weapons at its disposal to make taxpayers pay what the IRS determines is their fair tax share.
The IRS can add fines, penalties, and interest to the basic tax obligation, causing the tax debt to pile up. The IRS can also serve enforcement notices and take enforcement action, seizing accounts and other assets.
Taxpayers may not be so aware yet that the IRS has a new tax-enforcement tool for threatening a taxpayer’s professional license. It’s one thing for the IRS to take a taxpayer’s money. It’s quite another thing for the IRS to take a taxpayer’s way of making that money.
Professionals have always faced the risk that some event or action might call their state licensing board’s attention to their alleged professional character or conduct defect. Crimes of dishonesty or violence, for instance, are pretty sure causes of professional license discipline. But professionals can now add unpaid IRS tax obligations to the list of licensing board discipline risks.
Unpaid financial debt has long been a license discipline risk. New state laws and measures of publishing tax obligations, though, are adding to the license discipline risk.
California’s Delinquent Taxpayer Accountability Act is a leading example. The Act requires the state’s Franchise Tax Board to publish the names of the top five-hundred taxpayers owing at least $100,000. The Act’s express purpose is to shame and goad those taxpayers into paying up.
Professional licensing boards don’t always know when one of their licensed professionals has unpaid debt. Civil lawsuits seeking to collect a debt from a licensed professional is one way that licensing officials discover unpaid debt.
New laws and regulations giving government officials the authority to publish allegedly delinquent taxpayers’ names is now a new disclosure risk. Licensing boards are doubtless taking notice of professionals whose names fall high on taxpayer debtor lists.
License disciplinary officials take notice of a professional’s debt because of the temptation the debt might produce for the professional to take undue financial advantage of a client, adversary, patient, or the public.
Professionals of all kinds can face license disciplinary charges, including discipline for unpaid IRS tax debt. Don’t let your professional license fall prey to an IRS tax notice or the license investigation process.
If you face a license proceeding because of alleged IRS debt, you need professional license defense. Retain the Lento Law Group’s premier Team for your professional license defense. The Lento Law Group has successfully represented professionals nationwide on a wide variety of license defense issues.
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