Understanding New Jersey Tax Enforcement Data

New Jersey tax enforcement data obtained through a public records request shows a Division of Taxation that is settling far fewer tax debts than it did four years ago, even as its collection activity has intensified. Between fiscal year 2022 and fiscal year 2025, the acceptance rate for New Jersey Offers in Compromise fell from 55% to 12%, while collection dollars, bank levies, and warrants of execution all moved higher over the same period.

The shift shows up across nearly every enforcement category the division tracks. Bank levies increased annually, but warrants of execution and levy notices to financial institutions did not, while collection revenue still more than doubled, from $25.2 million to $53.5 million. At the same time, audit volume dropped by more than half, even as total dollars assessed stayed in the hundreds of millions, suggesting the state is auditing fewer taxpayers but pursuing larger cases.

New Jersey already ranks among the highest-collecting states in the country on a per-resident basis, so this enforcement pattern is unfolding against a backdrop of an already substantial state and local tax burden. For residents who currently owe the state money, the practical reality is a collection environment that has grown more aggressive on multiple fronts while offering fewer paths to a reduced settlement. The New Jersey Department of the Treasury released the underlying data through a formal request under the state's Open Public Records Act.

Key Findings at a Glance

Each of these figures comes from a public records response the New Jersey Department of the Treasury's Government Records Access Unit provided under tracking number C255751, covering Division of Taxation activity for fiscal years 2021-22 through 2024-25.

How New Jersey's Tax System Compares Nationally

Before looking at enforcement specifics, it helps to understand where New Jersey stands relative to other states on overall tax collection. According to the Tax Foundation's 2026 State Tax Competitiveness Index, which draws on U.S. Census Bureau data, New Jersey's tax structure ranks 49th out of the 50 states, ahead of only New York. Analysts attribute the low ranking to a combination of the nation's highest property tax burden, a top individual income tax rate of 10.75%, and a top corporate income tax rate of 11.5%, one of the highest in the country.

New Jersey also ranks among the states with the highest per-resident tax collections. Using U.S. Census Bureau data from the Annual Survey of State and Local Government Finances, the Tax Foundation calculated that New Jersey collected roughly $9,178 in combined state and local taxes per capita in fiscal year 2023, the fifth-highest total in the country, behind only New York, North Dakota, Hawaii, and Connecticut. The national average per capita state and local tax collection that year was $7,038.

Tax Foundation researchers note that New Jersey's high per capita collections reflect a progressive state income tax structure and a comparatively heavy reliance on public sector services such as mass transit, similar to New York and Connecticut. New Jersey's income tax has filing-status-dependent graduated brackets, topping out at 10.75% on taxable income above $1 million, and individual income tax collections make up close to half of the state's total tax revenue, a larger share than most states derive from a single tax category.

Beyond the income tax, New Jersey also imposes a 6.625% state sales tax, a 49.15-cents-per-gallon gas tax, and excise taxes on products such as cigarettes and alcohol. Property taxes, which fund municipal and school district budgets rather than the state government directly, carry the highest effective rate of any state in the country. Unlike resource-dependent states such as North Dakota or Alaska, New Jersey collects little to no revenue from severance taxes, since it has no significant oil, gas, or mineral extraction industry; its tax base instead comes almost entirely from income, consumption, and property.

The U.S. Census Bureau maintains a public library of state and local tax collection data through its Annual Survey of State and Local Government Finances, which the Tax Foundation and other researchers use to compile these comparisons and rankings. This national context matters because it shows that the enforcement data in this guide is not occurring in isolation: New Jersey is both a high-collection state and, according to the records examined here, a state that has become considerably less willing to compromise on unpaid tax debt.

Where the Enforcement Data Comes From

The enforcement figures in this guide come from a public records request filed with the New Jersey Department of the Treasury under the state's Open Public Records Act. The Treasury's Government Records Access Unit responded under tracking number C255751 with data spanning three Division of Taxation program areas: Collection and Enforcement, Audit, and Counsel Services (which handles administrative appeals and Tax Court matters).

The records cover fiscal years 2021-22 through 2024-25. New Jersey's fiscal year runs from July 1 through June 30, so FY 2022 covers July 1, 2021, through June 30, 2022, and FY 2025 covers July 1, 2024, through June 30, 2025. No private, third-party, or law firm data was used; every statistic in this guide originates from the government's own records.

Offers in Compromise: The Settlement Data

A New Jersey Offer in Compromise, which the Division of Taxation also calls a Settlement Agreement, allows a taxpayer to resolve a tax debt for less than the full balance owed. The division evaluates each application based on the taxpayer's ability to pay, income, expenses, and asset equity.

The acceptance rate, which the division confirmed represents accepted applications divided by applications received in each fiscal year, fell 43 percentage points over four years. In practical terms, an estimated 84 taxpayers had a settlement approved in FY 2022 compared with an estimated 17 in FY 2025 — a roughly 80% decline in actual approvals. The public records response did not explain the decline, and the division has not confirmed what changed in its evaluation criteria.

Collections and Enforcement Actions

While settlement approvals fell, the division's use of its main collection tools increased across the board. A bank levy allows the division to seize funds directly from a taxpayer's account once the levy is served. A warrant of execution authorizes the state to seize and sell property, including real estate, vehicles, or business assets, to satisfy a debt. Before either tool is used, the division typically sends a certified demand letter and, for bank levies, a notice to the financial institution.

Total collection revenue rose 112% over the four-year span, from $25,248,636 in FY 2022 to $53,532,908 in FY 2025, peaking in FY 2024 at $54,357,327. Warrants of execution more than doubled, and the division confirmed that for collection activity, it tracks the number of bank levies but does not track wage garnishment counts or the number of tax liens it files against taxpayer property, even though the state has the authority to use both tools.

Payment Plans: A Growing Alternative

A payment plan, or installment agreement, lets a taxpayer pay a debt to New Jersey over time instead of in one lump sum. As Offer in Compromise approvals declined, payment plan enrollments moved in the opposite direction.

Enrollments increased 44.8% over four years, with the largest single-year jump occurring in FY 2025 — the same year the Offer in Compromise acceptance rate hit its low point. The division does not track payment plan terminations, so it is not possible to determine from this data how many plans are completed successfully versus defaulted.

Audit Activity: Fewer Reviews, Larger Assessments

Audit volume dropped 53.9% between FY 2022 and FY 2025, with most of the decline occurring in a single year, FY 2023. Despite far fewer audits, total assessments stayed in the $540 million to $735 million range across all four years, meaning the average dollar assessment per audit more than doubled. The division does not track audit outcomes by result type, so it is not possible to determine what share of audits resulted in no change, an additional assessment, or a refund.

Administrative Appeals and Tax Court

Taxpayers who disagree with an audit finding or a collection action can file an administrative appeal with the division's Counsel Services unit. If that appeal is unsuccessful, they may petition the New Jersey Tax Court.

Administrative appeal volume has stayed relatively stable, between roughly 1,036 and 1,162 filings a year. The division separately reported outcome categories — upheld, vacated, and revised — for appealed matters, but those totals span a broader set of cases than Tax Court closures alone and do not reconcile directly with the Tax Court figures above. The department has been asked for clarification on how the two data sets relate.

Data the Division Does Not Track

The public records response identified several categories of enforcement activity that New Jersey does not currently track, which limits how completely this data can describe the impact of enforcement on taxpayers:

• Wage garnishment counts
• Tax liens filed against the taxpayer's property
• Audit outcomes by result type (no change, additional assessment, or refund)
• Payment plan terminations or defaults
• Responsible person assessments against business officers

Each gap represents a natural target for a follow-up records request if the division begins tracking these categories in the future.

What This Means for New Jersey Taxpayers

Taken together, the data show a state that already collects more per resident than most of the country and has, over the last four fiscal years, become considerably more aggressive about collecting unpaid tax debt while approving far fewer settlements. For a New Jersey resident or business owner with an outstanding balance, the practical takeaways are straightforward:

1. Do not assume an Offer in Compromise will be approved. A thorough, well-documented application is essential, given the current 12% acceptance rate.
2. Respond promptly to collection notices. Certified demand letters, levy notices, bank levies, and warrants of execution have all increased in use.
3. Consider a payment plan as a realistic alternative. Installment agreements are the fastest-growing resolution path in the data.
4. Get professional guidance. An enrolled agent or tax attorney familiar with New Jersey's Division of Taxation can help evaluate which resolution option fits a given situation.

Frequently Asked Questions

What is the current New Jersey Offer in Compromise acceptance rate? 

The acceptance rate was 12% in FY 2025, according to Division of Taxation records obtained through a public records request. That's down sharply from 55% in FY 2022, a decline of 43 percentage points over four years. In practical terms, an estimated 84 taxpayers had a settlement approved in FY 2022, compared with an estimated 17 in FY 2025 — even though the state received a similar number of applications each year.

Is New Jersey collecting more tax revenue through enforcement? 

Yes, collection revenue more than doubled over the four-year period covered by the records, rising from $25.2 million in FY 2022 to $53.5 million in FY 2025, a 112% increase. Collections actually peaked slightly higher in FY 2024, at $54.4 million, before dipping to $53.5 million the following year. The increase coincided with more bank levies, warrants of execution, and levy notices being issued each year.

How does New Jersey's overall tax burden compare with other states? 

New Jersey ranked 49th of 50 states on the Tax Foundation's 2026 State Tax Competitiveness Index, ahead of only New York. The state collected about $9,178 per resident in combined state and local taxes in FY 2023, the fifth-highest per capita amount in the country, behind New York, North Dakota, Hawaii, and Connecticut. Analysts point to the nation's highest property tax burden and a top income tax rate of 10.75% as key drivers.

Does New Jersey track wage garnishments or tax liens? 

No, the state has the legal authority to garnish wages and file tax liens against taxpayer property to collect unpaid tax debt, but the Division of Taxation confirmed in its public records response that it does not track how many of either enforcement tool it issues in a given year. This is one of several data gaps identified in the records, along with payment plan defaults and audit outcomes by result type.

Are New Jersey audits increasing or decreasing? 

Audits are decreasing. The division conducted 65,900 audits in FY 2025, down 53.9% from 142,895 in FY 2022, with most of that decline occurring in a single year, FY 2023. Despite far fewer audits, total dollars assessed stayed between $541 million and $735 million across all four years, meaning the average assessment per audit more than doubled, from $3,787 in FY 2022 to $8,603 in FY 2025.

What should I do if I owe New Jersey back taxes? 

Options include requesting an installment payment plan, applying for an Offer in Compromise, or requesting a payment plan if you can't pay your balance in full now. Given that the settlement acceptance rate has fallen to 12%, a complete, well-documented OIC application matters more than in past years. Responding promptly to any collection notice is also important, since bank levies and warrants of execution have both increased.

Methodology and Sources

The enforcement figures in this guide are drawn exclusively from the New Jersey Department of the Treasury, Government Records Access Unit, Response C255751, received in June 2026, covering Division of Taxation Collection and Enforcement, Audit, and Counsel Services activity for fiscal years 2021-22 through 2024-25. The division confirmed that the Offer in Compromise acceptance rate represents accepted applications divided by applications received per fiscal year. Estimated approval counts are calculated by multiplying the stated acceptance rate by applications received and are labeled as estimates throughout this guide.

National tax collection and ranking data referenced in the comparison section come from the U.S. Census Bureau's Annual Survey of State and Local Government Finances and the Tax Foundation's 2026 State Tax Competitiveness Index and related state tax data compilations, which use Census Bureau figures as their primary source.

The New Jersey Department of the Treasury was contacted for comment on this data on June 29, 2026. This guide will be updated if a response is received.

External Sources

• New Jersey Department of the Treasury, Government Records Access Unit, Response C255751 (June 2026, on file with author) 
• U.S. Census Bureau, State Tax Collections Per Capita interactive tool
• U.S. Census Bureau, Annual Survey of State and Local Government Finances (program overview)
• U.S. Census Bureau, Annual Survey of State Government Finances (state-level revenue and tax detail)

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Author: William McLee, MBT, MBA, is an Enrolled Agent licensed to practice before the Internal Revenue Service. He is the founder of GetTaxReliefNow.com and MWB Tax Solutions. Full bio and credentials →

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