New Jersey State Tax Lien Checklist

property. While tax liens no longer appear directly on credit reports as of 2018, the

Certificate of Debt is a public record that may be discovered by lenders, title companies, and others conducting public record searches.

The debt will continue to accrue penalties and interest, making the total amount owed larger over time. Continued non-response may result in more aggressive collection tactics. Under New Jersey law, the lien can remain enforceable for up to 20 years and may be renewed by filing a new warrant with the county recording officer. The state may also refer unpaid debts to a private collection company, which may add additional fees to your balance.

What This Does NOT Mean

A state tax lien does not mean your property has been seized or sold. It does not automatically prevent you from selling your home or vehicle, though a lien must be resolved before a clear title can be transferred. A lien also does not mean criminal prosecution will follow; tax debt is a civil matter handled through the Collection Process, not criminal law.

Finally, a lien does not prevent you from negotiating a payment plan with the state.

However, establishing a payment plan does not automatically remove or prevent the lien from being filed, particularly if your tax liability exceeds $2,500 or your payment plan term exceeds 12 months. Unlike federal tax liens filed under the Internal Revenue

Code, New Jersey state tax liens are governed by State regulations and procedures.

Checklist: What to Do After Receiving or Identifying a

New Jersey State Tax Lien Notice

Step One: Confirm the Lien Details

• Locate the lien notice or Certificate of Debt filing notice from the New Jersey

Division of Taxation.

• Review the notice carefully for the tax year(s) involved, type of tax owed (income,

sales, other), total amount listed, date the lien was filed, and your name and address as shown on the lien.

• Contact the Division of Taxation at (609) 292-6400 if the notice is unclear or if

you cannot locate it.

• Ask for clarification on whether the lien has been filed with the New Jersey

Superior Court and the specific county where it was recorded.

Step Two: Verify the Debt

• Contact the Division of Taxation to request a detailed statement of account

showing the original tax assessment, any penalties applied, interest accrued to date, and the current balance owed.

• Ask for a written statement showing how the total amount was calculated.
• Check your records for any payments made that may not yet be reflected on the

state's records.

• Review whether you filed all required tax returns for the years in question, as

missing tax filings may affect your ability to negotiate a payment plan.

Step Three: Gather Required Financial Information

• Collect recent pay stubs (last 30 days), most recent tax returns (state and

federal, if available), and bank account statements (last two months).

• Prepare a list of debts and monthly obligations, proof of residence, and

identification (driver's license or state ID).

• Organize these documents in a single folder for easy reference.
• Be prepared to provide financial documentation if requesting a payment plan

longer than 12 months, as the state may require detailed financial statements for extended terms.

Step Four: Contact the Division of Taxation's Collections Unit

• Call the Division of Taxation at (609) 292-6400 to request a transfer to

Collections or the Judgments Unit.

• Explain that you have received a state tax lien notice and want to address the

debt.

• Ask about current payment status and any recent payments not yet posted,

eligibility for an installment agreement (payment plan), and whether interest continues to accrue during a payment plan.

• Request written confirmation of any information provided verbally.
• Ask specifically whether establishing a payment plan will halt additional

enforcement actions, such as wage garnishment or Bank Levy actions.

Step Five: Review Payment Plan Options

• Ask the Collections Unit about installment agreement terms, including the

minimum monthly payment amount (typically $25), the length of the payment plan, and any fees associated with setting up a payment plan.

• Understand that standard payment plans may be approved up to 60 months, and

plans beyond 60 months will require additional financial documentation and are subject to stricter approval criteria.

• Be aware that a Certificate of Debt (tax lien) will be filed against you if your tax

liability is greater than $2,500 or your payment plan term is longer than 12 months, even if you establish a payment plan.

• Request this information in writing.
• Confirm that the state will continue to add interest to your unpaid tax balance

during the payment plan period.

• Ask whether establishing a payment plan affects any liens already filed or

prevents future liens from being filed.

Step Six: Understand Limited Penalty Relief Options

• New Jersey offers fewer penalty relief options than federal tax procedures.
• According to the Taxpayer Bill of Rights, the Division of Taxation may waive

penalties only if you can show that you reasonably relied on written advice from the New Jersey Division of Taxation that proved to be erroneous.

• This is a much narrower standard than penalty abatement relief available from

the IRS, and penalty abatement is very difficult to obtain in New Jersey.

• If you are experiencing financial hardship, contact the New Jersey Taxpayer

Advocate Office for assistance, though this does not guarantee penalty relief.

• Note that New Jersey does not have a formal Offer in Compromise program;

instead, the state has a closing agreement option, though the criteria are not well-defined and acceptance is rare.

Step Seven: Submit a Written Response or Payment Plan Request

• If negotiating by phone, follow up with a written request.

• Send a letter to the New Jersey Division of Taxation that includes your name,

address, and taxpayer ID number; reference to the tax year and amount owed; description of your proposed resolution (payment plan, lump sum payment); and supporting financial documents if requesting an extended payment plan.

• Include a brief explanation of your circumstances if requesting consideration of

financial hardship.

• Verify the current mailing address by checking the notice you received or by

calling (609) 292-6400, as addresses may vary depending on your specific case.

• Send correspondence by certified mail, return receipt requested.
• Keep a copy for your records.

Step Eight: Be Aware of the Collection Process and Additional Fees

• If your account has been referred to a private collection agency such as Pioneer

Credit Recovery, you may be charged a Referral Cost Recovery Fee in addition to your tax liability.

• This fee is typically 10.7% of the outstanding balance and is added to the total

amount you owe.

• Contact the private collection company directly using the information provided in

their notice, or contact the Division of Taxation for guidance on handling accounts assigned to private collection agencies.

• Understand that once a Certificate of Debt is filed, the state may also use

Warrants of Execution to conduct bank account levies or other enforcement actions.

Step Nine: Document All Communication

• Keep detailed records of the dates and times of phone calls, the names of staff

members spoken with, the topics discussed, the information provided, and any promises or agreements made.

• Save all written correspondence from the state.
• Save copies of any payments or payment confirmations.
• Document any confirmation numbers provided during phone calls.
• If working with a tax professional, ensure all communications and agreements

are documented and shared with your representative.

Step Ten: Follow Through on Agreed Actions

• If you negotiated a payment plan, make payments on time; missing a payment

may result in the plan being canceled and additional enforcement action being taken.

• If requested to provide additional information, send it promptly.
• If the state requests verification of income or assets, provide it within the

requested timeframe.

• Keep records showing each payment and when it was made.
• Always include your name, address, and any tax account number provided by

the state when making payments so the payment is credited correctly.

Step Eleven: Request a Release of Lien Once Resolved

• Once the debt is paid in full, contact the Division of Taxation or Judgment Unit.
• Request written confirmation that the tax liability has been satisfied, the lien will

be released or removed, and a Release of Lien document will be filed with the

New Jersey Superior Court.

• Ask for a lien release certificate in writing for your records.
• If you need a certified copy of a Certificate of Judgment showing your tax

judgment is satisfied, you must submit your request in writing along with a $10.00 payment to the Superior Court of New Jersey, Office of the Clerk.

• You may also request a Uniform Commercial Code search through a title

company to verify that the lien no longer appears on the public record.

• If you are refinancing or selling real property, the lien must be satisfied and

released before closing can occur.

What Happens After This Is Completed

Once you have contacted the Division of Taxation and provided information about your situation, the state will typically review your request and respond within a reasonable timeframe. If a payment plan is approved, you will receive written documentation of the terms, including the monthly payment amount and due date. The state will continue to apply your payments to the outstanding balance, and penalties and interest will continue to accrue unless specifically waived (which is rare in New Jersey).

The lien will remain on file even with an approved payment plan if your debt exceeds

$2,500 or your plan term exceeds 12 months. A Release of Lien certificate will be issued upon complete satisfaction of the debt. This release must be filed with the Clerk of the New Jersey Superior Court to remove the public record of the lien.

Common Mistakes to Avoid

• Ignoring the lien notice: Failing to respond or contact the state will not resolve

the lien. The debt will grow, and more aggressive collection tactics may follow.

• Failing to verify the debt amount: Before agreeing to a payment plan, confirm

that the balance shown on the lien is accurate. Errors do happen, and overpayments should be identified early.

• Missing payment plan deadlines: If a payment plan is established, missing a

payment may result in the plan being canceled and in additional enforcement action.

• Not keeping payment records: Always save proof of payment. In case of

disputes about what has been paid, your records will protect you.

• Sending payments without a taxpayer ID or reference number: If making a

payment, always include your name, address, and any tax account number provided by the state so the payment is credited correctly.

• Failing to follow up in writing: Verbal agreements are helpful, but written

confirmation protects both you and the state. Always follow up phone calls with a letter summarizing the discussion.

• Providing incomplete information: If the state requests financial documents,

provide complete and accurate information. Incomplete submissions may delay resolution.

• Assuming a payment plan removes the lien: A payment plan does not

automatically prevent or remove a lien, especially for debts over $2,500 or for plans more extended than 12 months.

• Not requesting a Release of Lien after payment: Once the debt is satisfied,

you must actively request a Release of Lien to ensure the public record is updated and the lien is removed from your property.

Frequently Asked Questions

If I have a state tax lien, will my real estate be sold?

A lien does not automatically result in the property sale. The lien is a claim against your real estate and personal property, but the state must follow additional legal steps before seizing or selling assets. However, the lien gives the state the authority to pursue a levy or seizure if the debt remains unresolved.

How long does a New Jersey state tax lien stay on record?

Under New Jersey law, a lien can remain enforceable for up to 20 years from the date of filing. Within 20 years from the date of filing or from the date of the last extension, the lien may be extended by filing a new warrant with the county recording officer. The lien remains in place until the tax liability is paid in full or resolved through official state action.

Can I refinance my home or sell it while a lien is in place?

A lien will typically need to be satisfied before real property can be sold or refinanced with a clear title. The lender or buyer's title company will identify the lien during the title search and require it to be paid off before closing. You may be able to negotiate with the state to accept payment from the sale proceeds, but this arrangement must be made in advance.

Will a New Jersey state tax lien appear on my credit report?

Tax liens no longer appear directly on consumer credit reports as of April 2018.

However, the Certificate of Debt is a public record filed with the Superior Court that may be discovered by lenders, title companies, and others conducting public record searches. While it does not directly affect your credit score, it can impact your financial health and your ability to obtain financing.

Does a payment plan stop wage garnishment or bank account levies?

Establishing a payment plan may stop additional enforcement action in some cases, but this is not guaranteed. Confirm with the Collections Unit or Judgment Unit whether a payment plan will halt garnishment or Bank Levy actions before agreeing to the terms.

The state may continue enforcement if you miss payments.

Can the lien be removed before the debt is paid?

The lien cannot be removed until the underlying tax liability is satisfied. A Release of

Lien certificate can be requested once the debt is fully paid. Paying off the balance is typically the only way to obtain a release and clear the public record.

What if my account has been assigned to Pioneer Credit Recovery?

If your account has been referred to a private collection company like Pioneer Credit

Recovery, you will be charged a Referral Cost Recovery Fee in addition to your tax liability. Contact the private collection agency directly using the information provided in their notice, or contact the Division of Taxation for guidance on handling accounts assigned to private collection agencies.

Facing State Tax Enforcement Action?

If you’ve received a notice related to sales tax or payroll tax enforcement and are unsure how to respond, our team can help you understand your options and next steps.

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• State enforcement notices and responses
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• Payroll & trust fund tax enforcement issues
• Penalty and interest reduction options
• Payment plans and state tax relief eligibility
• Representation before state tax agencies

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