Montana Taxing Information
Execution of Warrant (Levy)
After a warrant has been issued, the department may proceed to execute upon the warrant in the same manner as a judgment and may levy upon real and personal property including a levy upon earnings. A levy on earnings stays in effect for 120 days or until the liability is satisfied, whichever occurs first.
After the time for appeals has expired, the department may proceed to collect delinquent taxes through the offset of any tax refunds due to the taxpayer or through the offset of wages earned from the state.
If you have a tax liability that you are unable to pay off in full, you may request a payment plan that allows you to resolve the balance over a short period of time through regular payments. Penalties and interest will still be added to your account even if you are approved for a payment plan. The following conditions generally apply to payment plans approved by the state of Montana:
- A payment plan must typically be set up as an automatic deduction from a checking or savings account.
- Payment plans are usually required to be for payments in the amount of $50 or more and for a period of 12 months or less.
- If you propose payments over a period longer than 12 months, or for payments less than $50, a financial condition statement will be required and a tax lien will typically be filed to protect the state's interest.
- You must remain compliant with all other tax balances that are due during the term of your payments plan.
There can be many penalties that are associated with failing to file or pay your taxes on time. The following are some of the penalties imposed by the state of Montana for delinquent taxpayers:
- Late filing penalty: $50, or the amount of tax due, whichever is less.
- Late payment of tax: 1.2% - 1.5% a month or fraction of a month on the unpaid tax. The penalty may not exceed 15% of the tax due.
- Failure to File Return: Failure to file return with 60 days of receiving written notice from the department will result in additional penalty of not less than $1,000 and not more than $10,000.
Penalty Waiver: If you have a reasonable cause for why you were unable to file or pay on time, you may be able to qualify for a waiver of penalty. The department will review each case on an individual basis to determine if reasonable cause or hardship exists. Ignorance of the tax code, or inability to pay does not constitute reasonable cause. According to the department of revenue, "reasonable cause" for waiver of penalty and interest is construed in favor of the collection of the penalty and interest.
You may represent yourself or have someone represent you in dealings before the Department of Revenue. In the case of tax appeals, you must represent yourself or have a representative that is an attorney. Non-attorney representation is not allowed at the State Tax Appeal Board or in District Court. To authorize one or more individuals to represent you before the Department of Revenue, use Form-POA, Montana Power of Attorney.
If you disagree with a notice of assessment, notice of proposed disallowance of a claim for refund, or other decision by the Department of Revenue, you may file a written appeal. Interest and penalties will continue to accrue until the total tax is paid, even if you file an objection or appeal. You may take the following steps to resolve outstanding issues and work with the Department of Revenue to settle a dispute.
- Informal Review: to request an informal review by the Department's Business and Income Taxes Division, you may file an objection, which must be in writing and must be filed within 30 days of the date of the notice of action that you are objecting to.
- If your issue cannot be resolved at the division level, you may appeal to the Office of Dispute Resolution. To file an appeal with ODR, you must file a written appeal within 15 days of the date on the notice of determination from the Businesses and Income Taxes Division. You will be scheduled for a conference and if necessary, hearing or mediation.
- If you do not agree with the decision made by ODR, you may appeal to the State Tax Appeal Board. You must make the appeal within 30 days of a final department decision.
- If you do not agree with the decision made by the State Tax Appeal Board, you may appeal to the Montana District Court.
- If you do not agree with the decision of the Montana District Court, you may appeal to the Montana Supreme Court.
Warrant for Distraint (Lien)
If you have not paid a tax within 30 days of the due date, the department may issue a notice informing you that you have 30 days from the date of the notice to pay the tax. If you do not pay within 30 days, a warrant for distraint may be issued. A warrant for distraint, also known as a tax lien, is an order for the sheriff, or an agent authorized by the tax code, to collect a tax by the method of levy upon and sale of real and personal property. The warrant may be issued for the amount of unpaid tax plus any penalty or interest that has accumulated. Personal property may include real estate, bank accounts, wages, boats, business equipment and supplies and more.