How New Jersey Collects Taxes & Options Available for Tax Help
The Division of Compliance Activity of New Jersey’s Division of Taxation is charged with the responsibility of collecting State taxes on behalf of the New Jersey Department of Treasury. If an individual or business is behind in filing and/or paying their taxes and doesn’t seek to resolve those issues with the Division of Taxation, they risk being subject to interest and penalties as well as aggressive collection efforts including bank levies, the garnishment of wages and other repercussions as follows:
The Division of Taxation is given 4 years from when you file your tax returns to assess you with additional taxes. However, if you did not file a tax return or you filed a false or fraudulent tax return, there is no time limit for assessing you with more taxes.
Collection Agency Fees
If the Tax Division is forced to refer your unpaid tax liability to a collection agency you will be charged a 10% Referral Cost Recovery Fee, which will be added to the amount of your tax debt. Furthermore, until the full debt is paid, interest and penalty charges will continue to accrue.
Set-Off or Offset Programs
The New Jersey Division of Taxes is a participant in various set-off programs. These prevent people or businesses that are delinquent in paying their taxes from receiving payments from the U.S. or state governments.
The following programs are currently in effect:
Set-Off of Individual Liability (SOIL)
The Division of Taxation administers the SOIL program by issuing notices to taxpayers with delinquent tax debts. These notices will also be sent to the U.S. Treasury and other state agencies. Once a waiting period of 35-45 days, SOIL will withhold New Jersey Gross Income Tax Refunds, Saver Rebates and Homestead Rebates.
Set-Off of Federal Refunds for Individual Liability (FOIL)
Once you’ve received a Gross Income Tax liability tax bill from the Division of Taxation you are given 90 days before the issuance of a Notice of Intended Federal Set-Off. Once this Notice is issued you are given 60 days pay your taxes or somehow resolve the matter before the information is passed onto the Federal Management System (FMS). After FMS is notified it is then authorized to forward any Federal Income Tax refunds owed to you to the State of New Jersey for payment on your tax debt. The Federal government will then notify you of the set-off and any associated processing fees, which are currently $22 per transaction.
State Reciprocal Set-Off
At the current time, New Jersey has a reciprocal arrangement with the State of Maryland. Additional reciprocal agreements are in the works with New York, Connecticut and Delaware. These agreements permit tax refunds that are owed to individuals to be set-off and instead sent to the reciprocal states if that individual has delinquent tax liabilities in one or more of those states.
State Vendor Set-Off
If a particular State vendor is delinquent in their State taxes, this program allows for the withholding of contract payments from the debtor so that the payments can be used to pay off the tax liability.
Federal Treasury Offset Program (TOP)
This is a reciprocal agreement between the Federal government and the State of New Jersey. Under this program payments from the U.S. government to contract vendors can be withheld if those venders have a delinquent state tax debt. When a taxpayer receives a tax bill from the Division of Taxation, he/she has 90 days to pay or otherwise resolve the tax debt or a Notice of Federal Set-Off will be issued. This gives the taxpayer an additional 60 days to resolve the matter or the offset will go into effect.
The person whose job it is to pay trust fund taxes, such as Motor Fuels tax, Sales tax and Gross Income Withholding tax, to the State on behalf of the business may be held personally liable for those taxes if they are not paid. Every business should consult with a reputable tax professional on a regular basis for any tax help or advice they can offer so the business stays in compliance with all tax laws.
Power of Attorney
You are within your rights to designate a qualified individual to provide you with tax help in working with the Division of Taxation on your behalf. To do this, you would need to complete, sign and submit an Appointment of Taxpayer Representative Form M-5008-R.
Options for New Jersey Taxpayers in Need of Tax Help or Tax Relief
The New Jersey Division of Taxation of the Department of Treasury enforces State tax laws, oversees tax assessments and collections. Individuals file their tax returns and pay what they owe in taxes to the Division of Taxation. Invariably there are taxpayers who are unable to pay the full amount they owe in taxes, or taxpayers who simply get behind. The Division of Taxation offers tax help and sometimes even tax relief to individuals and businesses in a variety of ways, as follows:
If you dispute your tax assessment you have the right to an appeal. If this is something you are considering now might be a good time to hire a reputable tax professional to give you the advice and tax help you need to navigate your appeal. The Division of Taxation offers taxpayers the following options for appealing their assessment:
You may file your appeal with the Tax Court as long as it is within 90 days of the date the determination was made and includes the required fees.
You may file a written protest with the Conference & Appeals Branch requesting an informal administrative hearing. You are entitled to represent yourself or designate your accountant, attorney or personal agent to offer tax help by representing you.
If you ended up paying the entire amount you were assessed within one year after the time to appeal or protest assessments has expired for tax periods starting on or after Jan. 1, 1999, you are entitled to file a refund claim after the fact using Form A-1730. You must do this within 450 days after the time to appeal or protest has expired.
You will continue to accrue interest on your unpaid tax debt even if you’ve filed an appeal or protest.
Installment Payment Plans
If there is no way you can fully pay your tax bill, you may qualify for an Installment Payment Plan. To get the ball rolling you would need to submit a Deferred Payment Request Form to the Division of Taxation. Each case is reviewed individually and when the Director approves any payment plan, it includes the amount of the unpaid tax plus interest and penalties. Interest will keep accruing until the tax debt is paid in full.
To be eligible for an Installment Payment Plan, these are the qualifications you must meet:
- Be current on the filing of all your tax returns.
- You must be capable of paying off your entire tax liability within 36 months.
- Generally, your State tax debt must be more than $500.
Installment Payment Plans usually last from 3 to 36 months, however if you are experiencing extreme hardship or extraordinary circumstances, you can ask for tax help with more time.
To apply for an Installment Payment Plan, do the following:
- Visit the New Jersey Division of Taxation website and go to the Deferred Payment Plan page. Read the entire page so you understand all the guidelines. Click Agree before continuing.
- Fill out the Deferred Payment Control Request Form as well as the Responsible Person Acknowledgement and Judgment Authorization.
- Mail both to the address provided on the right side of the page at the bottom.
The Division will contact you once they make a decision and there is no timeframe for this. If you have questions and you’re not sure which number to call for tax help and advice, use the Main Customer Service number at (609) 292-6400.
If an individual or business is struggling to keep up with their current installment payments, the Division may allow some flexibility. If you are currently making installment payments and are experiencing financial hardship, the Division may allow agree to adjust the terms.
If your tax debt exceeds $5,000 and you’re on an Installment Payment Plan that exceeds 12 months, a Certificate of Debt will be filed in court against you, plus there will be a 10% collection fee added onto your tax liability. Under certain circumstances if you default on your payment agreement, a Certificate of Debt will be filed in court against you plus a 10% collection fee will be added to your tax bill.
If you do not have the money to fully pay your state taxes, but you are willing to pay a lump sum amount towards the debt, you can ask the Division of Taxation for a Closing Agreement. You would need to complete and submit Closing Agreement Application Form 906 and include copies of your past two year’s federal income tax returns. Mail your request to:
New Jersey Division of Taxation
Closing Agreements, 9th Floor
P.O. Box 245
Trenton, NJ 08695-0245
The application will ask you to state your reasons for why you don’t think you should have to pay the full amount you owe in back taxes. You will also have to state the lump sum amount you are able to pay toward your tax liability and the source of that money.
New Jersey has an Office of the Taxpayer Advocate set up to independently review tax issues that taxpayers have been unsuccessful resolving through normal channels. The Taxpayer Advocate also helps taxpayers who are experiencing tremendous hardship due to the decisions or actions of the Division of Taxation.
Before turning to the Taxpayer Advocate for tax help or tax relief taxpayers must do everything they can to resolve their state tax problems through the Division of Taxation.
To contact the Taxpayer Advocate, complete Request for Assistance from the Office of the Taxpayer Advocate Form NJ-OTA-911 and submit it as follows:
State of New Jersey, Division of Taxation,
Office of the Taxpayer Advocate
P.O. Box 240
Trenton, NY 08695-0240
By fax: (609) 984-5147
By email: firstname.lastname@example.org
New Jersey Division of Taxation General Contact Information
If you have received a Billing Notice or Statement of Account and you would like to respond in writing, please send your letter to the address on your Notice or Statement. If you no longer have the Notice or Statement, you can send your letter to the following address:
New Jersey Division of Taxation
P.O. Box 999
Trenton, NJ 08646-0999
Automated Services: (609) 826-4400 or (800)-323-4400 (NJ, NY, PA, DE, and MD)
Personal Services: (609) 292-6400
TTY/TDD: (609) 984-7300 or (800) 286-6613 (NJ, NY, PA, DE, and MD)
Regional Information Centers are open weekdays between 8:30 a.m. and 4:30 p.m. and are there to offer tax help to taxpayers:
- Camden Center: 2 Riverside Dr. Suite 200, Camden, NJ 08103
- Fair Lawn Center: 22-08 Route 208 South, Fair Lawn, NJ 07410
- Neptune Center: 1828 West Lake Avenue, 3rd Floor, Neptune, NJ 07753
- Newark Center: 124 Halsey St, 2nd Floor, Newark, NJ 08225
- Northfield Center: 1915-A New Road, Route 9, Northfield, NJ 08225
- Somerville Center: 75 Veterans Memorial Dr. E, Ste. 103, Somerville, NJ 08876
- Trenton Center: Taxation Bldg., 50 Barrack St., 1st Fl. Lobby, Trenton, NJ 08695