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The Collection and Enforcement Activity

The Collection and Enforcement Activity is primarily responsible for the collection of delinquent and deficient taxes from businesses and individuals. After you file a tax return, the Division will determine if you owe taxes or fees. If you owe, the Division will send a billing notice which shows the amount due, including any penalties and interest.  The billing notice also includes a “Pay By” date, when the balance due must be paid in full, along with information on how the liability was determined.

If you don’t pay the amount due in a timely manner, the following steps may be taken to collect the taxes or fees due.

The Collection Process

If you don’t pay the amount due within the timeframe shown on your billing notice, your account/tax liability will be referred to Pioneer Credit Recovery (PCR), who will send you an initial contact letter.  PCR is the Division’s authorized collection agency and is overseen by the Collection and Enforcement Activity Additional information about PCR and their role in the collection process.

If you fail to file a tax return, your account is considered to be delinquent and your tax liability will be arbitrarily assessed.  If this is the case, you should file all missing returns to ensure that the Division’s records reflect your true liability. 

Notice and Demand for Payment

As part of the collection process, a Notice of Demand for Payment letter will be sent to you via certified mail, which includes an updated schedule of liabilities.  This official notification gives you either 30 days (for deficient items) or 90 days (for delinquent items) to resolve the issue. This letter also includes your appeal rights and information on what will happen if you do not pay the amount due or file the required return.

The Certificate of Debt (COD)

If you don’t pay the amount due or file an appeal within the time granted in the demand letter, a Certificate of Debt (COD) will be filed against you and/or your business with the Clerk of the New Jersey Superior Court pursuant to R.S. 54:49-12.  A notification of this judgment will also be sent to you.

If a COD is issued for the outstanding liability, a 10% Cost of Collection Fee is added to the docketed judgment and becomes part of the outstanding liability.

What Happens Next?

If you fail to satisfy any portion of the outstanding liability after receiving routine notices and requests for payment, your case is referred to the Division’s Collection & Enforcement Branch.  Once the COD has been filed, you may be subject to the following collection actions without further notification:

FOR BUSINESSES ONLY:  Division personnel will/may conduct a final warning visit to your business location to inform you of the intent to seize your business or the assets of your business in an attempt to resolve the debt.  Prior to the seizure of your business or its assets, you will receive in writing from the Division the date you are expected to comply and what will happen if you do not do so.  

If the debt is not resolved, the Division may seize the assets of your business any time after the expiration of your date to comply.  If the debt is not resolved following the seizure of assets, your assets are subject to public auction under the authority granted in N.J.S.A. 54;49-13A.  Any proceeds from the public auction will be applied to your outstanding liabilities. 

If collection action or payment results in the satisfaction of all outstanding liabilities under judgment, a Warrant of Satisfaction of Judgment will be processed with the Superior Court and the case will be closed.  However, if the liability is not resolved, the debt remains under judgment.  Interest will continue to accrue on the outstanding liability until the debt is resolved.

Following the filing of a COD, if your business is no longer operating and has no seizable assets, your case will be referred to the Division’s Attorney General Referral Section.  You should also be aware that COD’s issued by the Division are in effect for 20 years and, at the Division’s discretion, can be renewed for an additional 20 years beyond that.  

How to Resolve Your Outstanding Debt

At any point during the collection process, you can take one of the following steps to resolve your debt:

  • You can submit a request for a Closing Agreement

  • Additional information on how to request a Closing Agreement.
  • Other areas where the Division may be able to provide assistance.

    Each request for assistance is carefully reviewed on a case-by-case basis.  However, the Division is not required to agree to your request after reviewing your specific circumstances.

Other Information

At any point during the collection process, the Division may refer your case to the Office of Criminal Investigation or to the Audit Activity Branch, if appropriate. 

Information about the Office of Criminal Investigation

Information about the audit process.

For additional information about the collection process.

Your Rights and Responsibilities

Please visit the following web pages for information regarding:

NJ Taxpayers' Bill of Rights

Preparing for Your Protest and Conference in New Jersey
Last Updated: Monday, 08/14/17

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