State Of Nj Estimated Tax Payments | Tax Amnesty New Jersey | Tax Amnesty Nj
Overview of New Jersey Back Taxes Consequences and Resolution Options
All aspects of the state’s tax administration are under the jurisdiction of the State of New Jersey, Department of the Treasury, Division of Taxation (the “Division”).
Everything is managed by it, including tax collection and assessment. Having said that, the Division has decided to work with a private business to help collect unpaid taxes. For this duty, Pioneer Credit Recovery is currently employed by the Division. To get a tax settlement, a taxpayer must engage directly with Pioneer once their case has been filed.
The Division will analyze the taxes due and assign a caseworker to the account after generating an assessment for taxes payable to the State of New Jersey. After that, a first contact letter with a schedule of the amounts due will be mailed by the caseworker. The caseworker will attempt to get in touch with the taxpayer over the phone if they don’t reply to the first correspondence. The Division will file a Certificate of Liability (“COD”) with the New Jersey Superior Court Clerk if the unpaid taxes are still outstanding.
In practical terms, a COD is a tax lien’s counterpart in New Jersey. The state will also start charging a Cost of Collection Fee in the event that the Division issues a COD. The amount outstanding includes the collection fee. In addition, penalties and interest are added to the taxes owing by the State of New Jersey.
Contact the New Jersey Division of Taxation:
- Individual Taxes: 609-292-6400
- Business Taxes: 609-292-6400
- General Inquiries: 1-800-323-4400
- Collections: 1-866-372-6840
- Website: New Jersey Division of Taxation
Individual Tax Options in New Jersey State
There are three primary ways for taxpayers who owe the State of New Jersey money to settle their tax debt. These are the following:
- Installment Agreement (Payment Plan),
- Closing Agreement, and
- Penalty Abatement
Another name for an installment agreement is a payment plan. Under this payment plan, the taxpayer will pay the Division a set amount each month until the outstanding tax burden is satisfied. An Offer in Compromise is what the federal government and some states refer to as a program comparable to a Closing Agreement.
In this case, the taxpayer may propose to pay less than what they owe in order to resolve their late tax bill. Lastly, a formal request requesting relief from tax penalties is known as a Penalty Abatement request. Stated differently, the taxpayer requests that the Division waive all or a portion of the tax penalties that it has imposed.
Determining the taxpayer’s legal rights with regard to the statute of limitations regulations for the collection of unpaid taxes under New Jersey law is arguably the first step a taxpayer should take before pursuing a settlement.
In order to file a COD against the taxpayer for the unpaid tax, the Division in New Jersey has six years from the date of the initial assessment to file the case with the New Jersey Superior Court. In addition, the State Attorney General may file a lawsuit in New Jersey Superior Court against the taxpayer to recover unpaid taxes that were assessed within the six years prior to the lawsuit’s start date. Lastly, the Division is only required by New Jersey law to renew the COD every 20 years. Furthermore, it does not set a time restriction on how long the Division can continue to issue CODs. Complete payment of the taxes is the only way to obtain a COD from the Division.
Most states and the federal government offer programs for innocent or damaged spouses. For those taxpayers who would not normally be liable for their spouse’s taxes, these schemes offer tax relief. Regretfully, one state that does not provide this program is New Jersey. Taxpayers must timely contest the assessment if they feel that the innocent spouse doctrine exempts them from paying taxes. If not, they have the option to present their case via the Closing Agreement Request procedure.
Alternative Options That May Be Available
Contest the Assessment
The taxpayer has the right to contest any proposed assessment of additional income tax that may be owed as a consequence of a State of New Jersey audit. There are three ways the taxpayer might appeal:
A taxpayer may either: (1) file an appeal with the required fee to the Tax Court; (2) protest and request an informal administrative conference with the Conference and Appeals Branch; or (3) if the taxpayer paid the entire assessment during the one-year appeal period, file a refund claim thereafter.
The Conference and Appeals Branch is not the appropriate place for the taxpayer to settle their tax dispute.. The New Jersey Tax Court is an administrative and judicial body; the Conference and Appeals Branch is an informal entity. Although a taxpayer may represent himself in New Jersey Tax Court, it is advisable to work with a professional lawyer with Tax Court experience.
Filing for bankruptcy can be costly. Therefore, for taxpayers who owe money on their taxes as well as personal obligations, this choice is usually doable. Certain taxpayers may be able to use bankruptcy to discharge their state tax obligations. If taxpayers would like to pursue this alternative, they should speak with a knowledgeable bankruptcy counsel.
The New Jersey Tax Amnesty Program
Numerous tax amnesty programs have been implemented by the State of New Jersey. There aren’t any running programs right now. A previous program that the state ran came to an end on January 15, 2019. Both individuals and companies with unpaid taxes could participate in this program. The Amnesty Program aims to bring past-due taxpayers up to date. For those who file and pay all of their taxes due, the state will eliminate fines and reduce interest. The majority of delinquent taxpayers ought to enroll in this program.
Appeal Rights
As will be covered in this section, taxpayers in New Jersey are not entitled to an appeal of decisions made by the Division regarding the collection of unpaid taxes. Nonetheless, the taxpayer, or their agent, ought to heed these few useful suggestions.
First, don’t hesitate to bring up difficult topics with a Division manager. A new pair of eyes as well as the power and knowledge of a supervisor can frequently aid in an amicable resolution.
Secondly, submit a request for help to the Office of the Taxpayer Advocate (OTA) if you think your case manager is discriminating against you or not adhering to New Jersey law. OTA assists taxpayers in resolving their tax issues by
:
- Assisting taxpayers who are enduring “undue hardship” due to actions taken by the Division;
- Assisting taxpayers whose issues are under the purview of the Division; and
- “Identifying systemic challenges within the Division that cause specific problems for taxpayers or increase their burden.”
OTA will suggest legislative or administrative remedies as necessary.
Further details regarding this are available on the Office of the Taxpayer Advocate website.
Certificate of Liability (COD)/Lien Releases
The Division will only issue a COD under certain circumstances. First, if all outstanding taxes have been paid in full, including any penalties, interest, and collection costs. Second, if the taxes due are paid through a Closing Agreement or Penalty Abatement, it might release a COD.
The state of New Jersey may pursue collection efforts such as liens, levies, private collection agencies, and other means to get the money it is due from you if you owe taxes. Ignoring your tax bill might have major implications, since the New Jersey Division of Taxation takes unpaid taxes extremely seriously.
A Certificate of Liability (COD) will be filed with the New Jersey Superior Court Clerk if you disregard the collection agency. The case is sent back to the State for additional collection efforts after the COD is filed.
A COD is a tax lien that is placed against you in New Jersey. The state’s legal claim over your assets in connection with your unpaid tax debt is known as a tax lien. It has the same impact as a docketed judgment and protects the state’s interest.
How in New Jersey to Remove a COD
You must use certified cash to pay the remaining amount in order to erase a COD. Satisfying the docketed judgment also refers to paying the remaining amount in full. Interest and penalties may be added to the final payment, increasing the amount beyond your initial tax bill. The state might be contacted to determine the amount of your compensation.
In summary
In the State of New Jersey, taxpayers struggling with delinquent taxes have a plethora of options at their disposal. That being said, there is a statute of limitations in New Jersey for holding open filed CODs. Furthermore, due to the system of penalties, interest, and collection fees, legitimate taxes owed quickly grow into enormous liabilities. Therefore, in order to decide which course of action is best for their particular circumstances, taxpayers should speak with a licensed tax professional as soon as these issues emerge.