The Collection Process

If we notify you that you have a New Jersey tax deficiency or delinquency and you do not respond to the notification, we will send your account to a collection agency.

What is a Deficiency?
A deficiency is when you file a tax return and have an amount due, but do not pay the tax in full. If we send you a bill and you do not pay it, we will refer you to a collection agency for debt collection.

What is a Delinquency?
A delinquency is when we have evidence that you should have filed a tax return, but you did not do so.
If you fail to file a required tax return, your account is considered delinquent and we will assess you a tax liability.
If you do not file all of your missing returns, we may refer you to a collection agency.

The Collection & Enforcement branch of the Division of Taxation is responsible for the collection of delinquent and deficient taxes from businesses and individuals. Collection & Enforcement has the following process for tax debt sent to the State’s collection agency:

• The collection agency will review the debt and assign your account to a caseworker.
• The caseworker will mail you an initial contact letter along with an updated Schedule of Liabilities detailing the current balance due.
• If you do not respond to the initial contact letter, your caseworker will attempt to contact you (or your authorized representative) by phone in an effort to resolve the matter. The contracted collection agency will never ask you to wire money or load a rechargeable money card as a way to pay a New Jersey tax debt. (See Tax Collections Scams for more information).
• If the debt remains unresolved after 30 days, the agency will issue a “Notice of Demand for Payment” via certified mail. This official notification requires you resolve the issue within 30 days (for deficient items) or 90 days (for delinquent items).
  Note: If you have delinquent returns, penalties are higher than if a return had been filed on time.
• If the debt is still outstanding, a Certificate of Debt (COD) is entered with the Clerk of the New Jersey Superior Court. A COD has the same force and effect as a Docketed Judgment – a lien ordered by a court of law. If a COD is issued for the outstanding liability, a Cost of Collection Fee is added to the Docketed Judgment and becomes part of the outstanding liability.
• All cases with CODs are assessed a Cost of Collection in addition to the Recovery Fee.
• Once the COD is in place, the case is returned to the Division for further collection.

The Referral Cost Recovery Fee rate is 10.7%

A Referral Cost Recovery Fee is added to your tax liability when you are assigned to the agency. This fee will be in addition to any interest or penalties. You also will be charged a Referral Cost Recovery Fee for delinquent tax returns.

Once you file your delinquent returns, you may receive an updated billing notice from the Division if you still have a tax liability. The Referral Cost Recovery Fee will not be reflected on this billing notice. It is shown as a separate item on the Schedule of Liabilities sent to you from the agency.

Any revised billing notice sent to you from the Division does not give you more time to make your payment to the agency. If you do not make your payment on time, you will be charged additional fees.

The Director will issue a Certificate of Debt if any State tax is not paid within the time prescribed by law. The Director also may charge a fee for the cost of collection. These fees are in addition to any interest or penalty, or both, allowed by law.

Pioneer Credit Recovery
PO Box 1018
Moorestown, NJ 08057
By Phone: 1-866-372-6840