United States

New Jersey announces tax resolution program


The New Jersey Division of Taxation (the Division) has announced details of a limited tax resolution program applicable to business and individual taxpayers' assessed but unpaid tax liabilities from the 2005 through 2013 tax years.

Pursuant to the program, business and individual taxpayers will be sent a notice that outlines their assessed but unpaid 2005 through 2013 tax liabilities in question and offers a reduction in the amount due, along with an abatement of penalties, collection costs, and recovery fees, if payment in full via the Division's online automated payment service is made on or before Nov. 17, 2014. When payment is received, the Division will execute a closing agreement that (1) resolves the taxpayer's liabilities listed in the notice and prohibits the Division from taking any further audit, civil, or criminal action in relation to those liabilities, and (2) closes the taxpayer's ability to claim refunds in relation to all settled taxes and tax years. The Division has indicated that it intends to pursue all outstanding tax, penalties, collection costs, and recovery fees from any taxpayer that fails to respond to the notice and make full payment of any outstanding taxes by the Nov. 17 due date.

Taxpayers with assessed but unpaid tax liabilities that do not receive a notice from the Division may still be able to take advantage of this program by contacting the Division directly. Taxpayers with unpaid liabilities stemming from unfiled tax returns may not participate in the program because these unpaid amounts have not been assessed. While it may be possible to convert these un-assessed amounts into assessed but unpaid liabilities by filing outstanding returns, the window for doing so is short, as any returns would have to be processed by the Division before an assessment would be made. A taxpayer in this situation would also have to contact the Division directly to participate in the program.

Given the short window of opportunity, taxpayers should consider participation in this tax resolution program, regardless of whether they have received a notice. Additionally, although the program announcement makes no mention of whether the Division will allow taxpayers participating in this program to address other open controversies as part of this program, taxpayers should consider utilizing the program to enter into a negotiated settlement.


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