Montana State Tax Lien Checklist
State enforcement by the Montana Department of Revenue occurs when a taxpayer owes unpaid taxes, and the state takes formal action to collect the debt. This typically happens after initial collection notices have been issued and payment has not been made.
A state tax lien is a legal claim placed against a taxpayer’s property and assets to secure the state’s right to collect the owed taxes. Understanding what enforcement means, what triggers it, and what steps follow helps taxpayers respond appropriately and prevent additional consequences.
Ignoring enforcement notices can result in wage garnishment, bank account levies, property seizures, or liens that affect credit and the ability to sell or refinance property. State enforcement represents a significant shift from standard notice procedures to active collection action.
Knowing what happens next is essential for protecting your financial interests.
What This Issue Means
State enforcement means the Montana Department of Revenue has determined that standard collection efforts have not resulted in payment, and the state is now taking formal legal action to recover the unpaid tax debt. An enforcement action may include filing a tax lien, issuing a wage garnishment, levying a bank account, or seizing property. This is not a threat or a warning. It is an active collection procedure.
Why the State Issued This or Requires This
Montana law allows the Department of Revenue to enforce the collection of unpaid taxes through liens and other collection tools when a tax liability remains unpaid after standard notice procedures. The state typically initiates enforcement when one or more of the following
conditions exist
- The taxpayer has not responded to prior notices from the Department of Revenue.
- No payment has been made toward the outstanding tax debt.
- A payment plan has not been established with the Collections Services Bureau.
- An existing payment plan has been broken, or payments have been missed.
Enforcement is considered the state’s last resort before more severe collection measures. The specific triggers and timeframes for enforcement are outlined in Montana Code Annotated Title
15, particularly MCA 15-1-701 through 15-1-707.
What Happens If This Is Ignored
If an enforcement action is ignored, the state typically escalates collection efforts. This may include adding penalties and interest to the debt, continuing or expanding wage garnishment, issuing additional levies, or filing liens against real property. In some cases, the state may refer the debt to external collection agencies or pursue other legal remedies.
The longer enforcement goes unaddressed, the larger the debt becomes and the more difficult it becomes to resolve. Ignoring enforcement does not make the debt disappear and typically makes the financial situation worse.
What This Does NOT Mean
State enforcement does not mean criminal prosecution is automatically happening. It does not mean your property will be seized immediately without notice. It does not mean you have no options or recourse. Enforcement is a civil collection procedure, not a criminal action.
You have the right to respond, request a hearing, or work out a payment arrangement even after enforcement has begun. Many taxpayers successfully resolve enforcement actions by taking action promptly.
Checklist: What to Do After Receiving an Enforcement
Notice
1. Read the entire enforcement notice carefully and identify the tax year or years involved, the amount owed, any penalties or interest listed, and the deadline for response if one is stated.
2. Verify the debt is accurate by checking your tax records against the notice, and note any discrepancies if you believe the amount is wrong.
3. Do not ignore the notice and respond within the timeframe stated, or contact the
Department of Revenue to ask about response requirements if no deadline is listed.
4. Gather documentation by collecting copies of any prior notices, tax returns filed, and payment records you have made toward this debt.
5. Contact the Montana Department of Revenue Collections Services Bureau at (406)
444-6900 or visit the Department of Revenue website to confirm the current balance and discuss your options.
6. Ask about available resolution options and inquire whether the state offers a payment plan, hardship considerations, or other arrangements that may apply to your situation.
7. Request an informal review if you dispute the debt, as you have the right to request one within 45 days of receiving most tax notices or within 20 days for centrally assessed property using Form APLS101F for most tax types or Form CB-1 for collections matters.
8. Do not attempt to pay informally or in cash, as the state will provide instructions for submitting payment in the proper format if you decide to pay.
9. Keep records of all communication by documenting the date, time, name of person spoken with, and details of any conversation with the Department of Revenue.
10. Follow up in writing if you reach an agreement, and ask for written confirmation to keep a copy for your records when the state agrees to a payment plan or other arrangement.
What Happens After This Is Completed
After you contact the state and provide information about your situation, the Department of
Revenue typically responds with the next steps. This may include a formal payment plan offer, a request for additional financial information, notice of a scheduled hearing, or confirmation that enforcement will proceed.
Montana offers payment plans for various tax types, including Individual Income Tax,
Withholding Tax, Corporate Income Tax, Small Business Corporation Tax, Partnership Tax,
Lodging Facility Sales and Use Tax, and Other Tobacco Products Tax.
When a payment plan is agreed upon, the state usually suspends further enforcement action while the plan remains active. If no agreement is reached, enforcement typically continues.
Common Mistakes to Avoid
Missing response deadlines can result in continued enforcement without additional opportunity to respond. Not contacting the state can forfeit resolution options.
Many taxpayers wait for the state to contact them again. Reaching out first shows you are taking the matter seriously and may open resolution options.
Ignoring hearing rights can forfeit the chance to present your case. If you dispute the debt or believe enforcement was issued in error, you have the right to request an informal review and, if needed, a referral to the Office of Dispute Resolution, where an Administrative Law Judge will hear your appeal.
Making partial or informal payments without clear instructions can create confusion about which tax year or obligation the payment applies to. Always get payment instructions from the state first.
Not documenting communication can create disputes about what was discussed. Moving without notifying the state can cause you to miss important notices.
Frequently Asked Questions
Can the state take money directly from my paycheck?
Yes, if enforcement includes wage garnishment, the state can issue an order to your employer to withhold a portion of your wages. Under Montana's general garnishment law (MCA
25-13-402), a levy upon earnings continues for 120 days or until the debt is satisfied, whichever occurs first.
Can the state access my bank account?
Yes, the state may issue a bank levy, which directs your bank to freeze and transfer funds from your account toward the unpaid tax debt.
Will a tax lien affect my credit score?
As of 2017, major credit bureaus no longer include tax liens on credit reports. Tax liens are public records that may still affect your ability to obtain credit through lender searches of public records.
What if I cannot afford to pay the full amount?
Contact the Montana Department of Revenue Collections Services Bureau at (406) 444-6900 to discuss payment plan options, hardship circumstances, or other possible arrangements.
Do I have the right to a hearing?
Yes, Montana taxpayers have the right to request an informal review within specific deadlines after receiving a notice they disagree with. You can request an informal review within 45 days for most tax types or 20 days for centrally assessed property.
Facing State Enforcement or Payroll Tax Issues?
If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.
We help with
- State enforcement actions and notices
- Payroll tax debt review and resolution
- Penalty and interest reduction options
- Payment plans and compliance solutions
- Representation before state tax agencies
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