Is a NJ Tax Lien or Judgment Preventing You From Buying or Selling Your Home?

October 13, 2021By: Christine Shannon, EA

new jersey tax lien or judgment

So, you’ve found THAT home. Your dream home in the best neighborhood. The one that you have been searching for-and thanks to the historically low-interest rates, you can finally afford it. Whether it is the contemporary, complete with natural light and open interiors, or that dreamy modern farmhouse (floating kitchen shelves required) reminiscent of the sprawling Waco ranchers that Chip and Jo would surely approve of, it is finally yours. Or is it?

Many buyers and sellers in this unprecedented housing market have found themselves getting the dreaded call from their title company. “Did you own a business in 2006? There is a judgment that must be paid prior to closing.” And so it begins. The State of New Jersey has been able to close old tax balances due to the buyers (and sellers) wanting to take advantage of this market. 

Whether you owned a business that remitted Sales Tax, Payroll Tax, Litter Tax, or Corporation Business Tax in the State of New Jersey, all eligibilities must be satisfied prior to the owners, previous or otherwise, can take possession of another property or sell their own. This also includes any person considered to be a “responsible party”. In many cases, Shareholders or Partners do not realize that they too are on the hook for any outstanding tax liabilities. This is New Jersey’s way of getting paid and most taxpayers don’t know where to start.

Options to Release a Tax Lien or Resolve a Tax-Related Judgment 

There are a few options available:

  1. Full Pay the Tax.
  2. Make an offer based on your current financial condition using Form 906 Closing Agreement Request.
  3. If you are unsure if the tax liability is accurate, hire a professional to assess the liability and help resolve the balance if any.

Most taxpayers believe that these business judgments finally just “go away” due to the age of the liability. The truth is that New Jersey has a statute of expiration of 20 years on most business liabilities and can extend that statute another twenty if they choose. This is where proper representation is vital.

Enter the Enrolled Agent. Enrolled Agents are touted as “America’s Tax Experts, a group of tax advisors who are federally-authorized tax practitioners empowered by the U.S. Department of Treasury. Enrolled Agents represent taxpayers before the Internal Revenue Service and all 50 State Agencies in audits, collections, and appeals. An EA. is the first line of defense in the resolution of these tax problems. Led by two E.A.’s and headquartered in New Jersey, our team has successfully closed all cases, stopped collection activity, released all liens, and saved our clients, all New Jersey taxpayers, close to $1 million.

The good news is that help is available, and most cases can be closed within 30 days. Buying a home should be an exciting time and the proper representation can make all the difference between owning your dream home and another year of paying rent. Christine Shannon is an Enrolled Agent located in Voorhees, NJ who has successfully helped many taxpayers resolve tax-related judgments with the state of New Jersey.