Montana Tax Relief

How Montana Collects Taxes & the Programs for Tax Help & Tax Relief

The Montana Department of Revenue functions in a similar manner to the Internal Revenue Service in terms of administering the State’s tax laws. One of the Department’s most important duties is to collect all taxes owed to the State. Taxpayers who have not filed their tax returns or fully paid the taxes they owe may find themselves being charged with interest and penalties. In addition, the Department will take steps to aggressively collect delinquent taxes, as follows:

Penalties

Taxpayers who do not file returns or pay their taxes on time are subject to penalties. Some of the penalties that the State of Montana imposes on delinquent taxpayers are as follows:

Filing tax returns late: $50 penalty or a penalty in the amount of taxes owed, whichever is the lesser amount.

Paying taxes late: 1.2% – 1.5% of unpaid taxes owed per month or part of the month, up to 15% of the tax amount owed.

Failing to file tax return: Failing to file tax return within 60 days of getting a notice from the Department of Revenue will subject taxpayer to an additional penalty of at least $1,000, but not to exceed $10,000.

Tax Warrant for Lien or Distraint

If you haven’t paid your taxes within 30 days of them being due, the Department will likely send you a Notice letting you know that you have 30 days from the date on your Notice to pay what you owe in taxes. If you fail to pay by the deadline of 30 days, the Department may issue a tax lien, also known as distraint. This orders the sheriff or another authorized agent, to place a levy on the sale of any real estate or personal property you own in order to collect the tax owed.

The tax warrant may be for the total amount of unpaid taxes plus the interest and penalties that have accrued. A tax levy may be placed on real estate, earnings, bank accounts, vehicles, boats, artwork, business supplies and equipment and more. Before risking this it would be wise to hire a reputable tax professional to give you the advice and tax help you need.

Levies

Once a tax warrant is issued, the Montana Department of Revenue will execute the warrant by placing a levy on any personal property, real estate holdings and wages. The earnings levy will remain in effect until the tax debt is paid or for 120 days, whichever happens first.

Offset

Once the taxpayer has exhausted all appeals, the Department may offset any tax refunds owed to the taxpayer and use those funds towards the taxpayer’s tax liability. Any wages earned from the State of Montana by the taxpayer can also be offset and directed towards paying off his/her tax liability.

Power of Attorney

You have the option of representing yourself before the Department of Revenue, but you may also get the tax help you need in this situation by designating someone else to represent you. If appealing your case, you can represent yourself or an attorney can represent you. The State Tax Appeal Board will not allow a non-attorney to represent you, nor will the District Court. In order for one or more people to represent your interests before the Department, use Montana Power of Attorney Form-POA.

Programs Available to Montana Taxpayers for Tax Help & Tax Relief

If you owe the State of Montana back taxes, the Department of Revenue offers tax help through several different programs:

Installment Payment Plans

If you have a tax assessment that you have no way of fully paying, you may request approval for an Installment Payment Plan so that you can pay your taxes off in monthly installments over time. You will still be charged interest and penalties until the debt is paid in full.

The following are the conditions usually applied when Installment Payment Plans are approved by the Department of Revenue:

Payments are typically deducted automatically from the taxpayer’s bank account, either checking or savings.

Payments are typically required to be $50 or more and the period of time of Installment Payment Plans generally does not exceed 12 months.

If you request your payment plan to exceed 12 months, or you want your payments to be less than $50, you will be required to submit a current Financial Condition Statement and the State of Montana will likely place a lien against you to secure the state’s interests.

During the length of your Installment Payment Plan you are required to comply with all tax filings and make tax payments when due.

The easiest way to receive tax help is to be approved for an Installment Payment Plan is to go online to the Montana Department of Revenue’s website. They have a Payment Plan Request page that will take you through the application and submission process step-by-step.

You can receive automatic approval if you meet these qualifications:

  • You can pay your entire tax debt in no more than 12 monthly payments.
  • You can pay at least $50 per month.
  • Your first payment will be made within 30 days of your request being submitted.
  • You will agree to automatic electronic payments.

If you do not meet the above qualifications, your request has to be considered manually. Call the Department of Revenue’s Citizen Services Center at (866) 859-2254 or (406) 444-6900 for information. You can also email them at: .

If you do not want to apply for an Installment Payment Plan through the Montana Department of Revenue’s website you can complete Request for Payment Plan Form ARC-1 for submission to the Montana Department of Revenue as follows:

Montana Department of Revenue
P.O. Box 1712
Helena, MT 59604

By fax: (406) 444-0750

You can make your installment payments weekly, biweekly or monthly, whatever you prefer.

Penalty Waiver

If there is a reasonable reason or cause for why you did not file your tax return or pay on time, you could qualify to have your penalties waived. The Department of Revenue considers each case individually in determining if there was a hardship or reasonable cause.

Ignorance of tax laws and obligations or being unable to pay are not reasonable causes. The Department will consider all “reasonable causes” in deciding whether to waive penalties will always be construed to favor the collecting of the penalty and interest charges.

Offer in Compromise

When you are behind in paying your taxes, you will continue to accrue interest and penalties, which can make it literally impossible to fully pay what you owe. If it is extremely unlikely that a taxpayer will ever fully pay their tax debt, the Department of Revenue may decide to accept a lesser amount and settle the entire debt through an Offer in Comprise.

The Department of Revenue provides taxpayers very little information on what they take into consideration in reviewing requests for an Offer in Compromise. All they will say is that on rare occasions they will accept a lump sum for less than what is owed to settle a tax debt.

An Offer in Compromise lets the delinquent taxpayer offer an amount of money, which is less than the total amount they owe, to settle their tax debt once and for all. If you want tax relief through an Offer in Compromise, write a letter to the Department of Revenue explaining your situation and why you cannot pay off the entire balance you owe. You can mail your request to:

Montana Department of Revenue
P.O. Box 6308
Helena, MT 59604

The Department of Revenue will not offer a timeframe for making their decision. If you have questions, please call them at (866) 859-3354 or (406) 444-6900.

Tax Appeals

If you disagree with decisions made by the Department in a Notice of Assessment that you’ve received, a Notice of Proposed Disallowance of a Claim for Refund or any of their other decisions, you have the right to file an appeal in writing. You will continue to accrue interest and penalties until the tax owed is paid in full, even if you’ve filed an appeal or objection.

If you plan on appealing your case it might be smart to consult with an experienced tax professional for the tax help and expertise they can offer in navigating the appeals process.

In working with the Department of Revenue, the following steps should be taken to resolve your delinquent taxes or settle your dispute:

Request that the Business & Income Taxes Division of the Department of Revenue give your case an Informal Review by filing a written objection. This must be submitted within 30 days of the date on the Notice you are disputing.

If you are unable to resolve your issue with the Division, you are entitled to file an appeal with the Office of Dispute Resolution. This must be in writing and filed within 15 days of the date on the Businesses & Income Taxes Division’s Notice of Determination. The Office of Dispute Resolution will schedule you for a conference and if need be, a mediation or hearing.

If you dispute the Office of Dispute Resolution’s decision, you have the right to appeal that decision with the State Tax Appeal Board. You must file your appeal within 30 days of the Department’s final decision.

If you dispute the State Tax Appeal Board’s decision, you are within your rights to appeal the decision to the Montana District Court.

If you dispute the decision of the Montana District Court, you can always appeal your case to the Montana Supreme Court.

Voluntary Disclosure Program

The Department of Revenue wants taxpayers who suspect they owe back taxes to make use of the Voluntary Disclosure Program. The State created this program to help taxpayers get out from under their tax debt and hopefully avoid more penalties and fees being added to their debt. To take advantage of this tax help program taxpayers must voluntarily register to pay any back taxes they owe.

To be eligible for this program, you must have had no previous interactions with the Department of Revenue having to do with your tax debt, and this includes being notified of an audit. You must also agree that you will pay your tax liability in full plus any accrued interest.

For Additional Tax Help

The Department of Revenue is happy to answer taxpayer questions and address their concerns related to unfiled tax returns or unpaid taxes. You can call the following phone numbers if you have general questions or concerns regarding your taxes:

Toll-free: (866) 859-2254
Local: (406) 444-6900

General inquiries can be mailed to:

Montana Department of Revenue
P.O; Box 6308
Helena, MT 59604

Mail inquiries regarding the Voluntary Disclosure Program to:

Montana Department of Revenue
Voluntary Disclosure Program
P.O. Box 5805
Helena, MT 59604-5805

To visit the Department of Revenue in person:

Sam W. Mitchell Building
125 N. Roberts, 3rd Floor
Helena, Montana