NJ tax debt reliefResolve back taxes with the state and IRS
New Jersey and the IRS collect back taxes separately, each on its own timeline and with its own liens and fees. Wasserman Accounting CPAs resolves state and federal tax debt for New Jersey individuals and businesses. We move to stop collection, negotiate a resolution you can keep to, and deal with both authorities so you do not have to. Call 609-281-8096.
New Jersey
- Own timeline
- Own liens
- Own fees
IRS
- Own timeline
- Own liens
- Own fees
We deal with both
How to resolve NJ and IRS back taxes
If you owe both, New Jersey keeps collecting while you are on an IRS plan, and the IRS keeps collecting while you are on a New Jersey plan.
Your options are a payment plan, a settlement, penalty relief, hardship status, and release of a lien or levy.
We confirm what you owe, file any missing returns, and work both authorities in parallel while handling the communication for you.
What happens if you owe New Jersey back taxes?
If you leave a state balance unpaid, the Division can:
- 1
Send your account to its collection agency and add a Referral Cost Recovery Fee of 9.85% (from June 15, 2026)
- 2
Enter a Certificate of Debt with the Clerk of the Superior Court, which has the same force as a court judgment
- 3
Add a Cost of Collection Fee to that judgment
- 4
Take your New Jersey refund and property tax relief payments and apply them to the debt through set-off
Set-off already took a refund? The NJ refund offset page covers how to deal with the agency that claimed it.
How is NJ tax debt different from IRS debt?
| New Jersey | Item | IRS |
|---|---|---|
| NJCertificate of Debt | Lien | IRSNotice of Federal Tax Lien |
| NJClosing Agreement | Settlement | IRSOffer in Compromise |
| NJPenalties and interest, plus the Referral Cost Recovery Fee and Cost of Collection Fee | Added fees | IRSPenalties and interest |
| NJSet-off | Refund offset | IRSTreasury Offset Program |
With proof of your New Jersey payment plan, the IRS takes the state payment into account when it works out what you can afford federally (IRM 5.15.1).
Owe both? We pull both accounts.
How much are NJ tax penalties on a $10,000 debt?
$5,085
in penalties and fees before interest.
Assumptions: $10,000 of tax on a 2025 return, filed and paid six months late in 2026, referred to the collection agency, then entered as a Certificate of Debt.
$10,000 of tax · 6 months late
| Charge and rule | Amount |
|---|---|
| Late filing penalty5% of the tax per month, capped at 25% | $2,500 |
| Late filing, monthly charge$100 for each month the return is late | $600 |
| Late payment penalty5% of the tax | $500 |
| Referral Cost Recovery Fee9.85% from June 15, 2026 | $985 |
| Cost of Collection FeeGreater of 5% of the tax or $100 when the Certificate of Debt is entered | $500 |
| Total penalties and fees | $5,085 |
+ interest, not shown
The Division also charges interest on the unpaid balance at the prime rate plus 3%, compounded annually (TB-21(R)).
10% or $200If the Division takes further collection action, it raises the Cost of Collection Fee to the greater of 10% of the tax or $200.
20% or $500If it sues, it raises the fee to the greater of 20% or $500.
What are your options for resolving NJ tax debt?
- A payment plan with the Division, the IRS, or both
- A settlement: New Jersey’s Closing Agreement or the IRS Offer in Compromise
- Penalty abatement
- Currently not collectible or hardship status
- Release of a lien, levy, or wage garnishment
- Innocent spouse relief
- Filing missing returns, so the Division stops adding penalties for unfiled returns
New Jersey tax payment plan rules
The Division’s payment plan terms, in plain terms:
- §1For a business, the Division wants every missing New Jersey return filed before it approves a plan
- §2For a plan longer than 60 months, the Division sets additional requirements and may ask for a financial statement
- §3The Division can still enter a Certificate of Debt while you are on a plan
- §4The Division keeps charging interest on the unpaid balance and may add the Referral Cost Recovery Fee to each outstanding item
- §5The Division keeps applying your refunds and property tax relief to the debt through set-off until you pay in full
We file any missing returns before we request the plan.
What is a New Jersey Closing Agreement?
A Closing Agreement is New Jersey’s settlement: a contract you and the Division sign, in which you pay and the Division accepts an amount in full and final satisfaction of the liability. In the agreed amount, the Division reduces or removes penalties and drops the Cost of Collection Fee and the referral fee. The Division has discretion to accept or refuse a request.
We prepare the request and the supporting financials and send them to the Division’s Closing Agreements unit in Trenton.
Closing Agreement
Your request must state
- a.Why you should not pay the full balance
- b.The lump sum you can pay
- c.The source of that money
How we resolve NJ and IRS tax debt
Your stepOur step
- 01
You sign power of attorney forms for the Division and the IRS, so both authorities deal with us.
- 02
We pull your account records from both and confirm what you owe, item by item.
- 03
We move to stop or release any levy or garnishment in place.
- 04
We prepare and file every missing return.
- 05
We negotiate the resolution with New Jersey and the IRS in parallel.
- 06
You keep your filings and current-year payments on time; the Division and the IRS can cancel a plan after a missed return or payment.
Who we help with New Jersey tax debt
- Individuals and businesses with back taxes or unfiled returns
- Anyone facing a Certificate of Debt, a federal lien, a levy, or a wage garnishment
- Taxpayers whose New Jersey refund or property tax relief the Division took through set-off
- Business owners and officers assessed personally for a company's sales tax or payroll tax
Behind on filing too? We prepare the missing personal and business returns, and if the Division has opened an audit instead, see our audit services.
How we price tax debt resolution
- How many tax years and returns we have to file
- Whether the debt is with New Jersey, the IRS, or both
- Whether we have to stop a levy or garnishment first
- The resolution pursued: we spend less time on a payment plan than on a Closing Agreement or an Offer in CompromisePayment planClosing Agreement or Offer in Compromise
- Whether the debt is personal, business, or both
We quote the fee in writing after the account review.
Call 609-281-8096 to start it.
Reviewed byApril Moore, EA, Practice Manager at Wasserman Accounting CPAs. Enrolled Agent with 20 years in business and individual tax, IRS representation, and IRS and state resolutions.
Talk to a New Jersey tax debt CPA
If you owe back taxes, have unfiled returns, or are facing a lien or levy, we can find out where you stand and deal with the state and the IRS for you. A CPA or EA answers — not a call center.