Montana tax payment plan with the Department of Revenue
Plans arranged by Montana’s Collections Services Bureau last 6 to 12 months. When you need more time, a Warrant for Distraint may be filed, which serves as a tax lien.
- Common plan
- Lasts 6 to 12 months
- Plan with more time
- Filing a lien is possible.
- Late payment penalty
- 0.5% each month
- Penalty limit
- The tax amount multiplied by 12%
Longer plans come with a lien, while default plans stay short.
Montana’s standard plan is short. If you cannot pay the full amount, the Collections Services Bureau page lists payment plans that last from 6 to 12 months. Plans that run longer are available too. In those cases the department may file a Warrant for Distraint to protect the state’s interest.
Most people pay the whole balance within 30 days, which settles the balance. Payment arrangements can be set up through your employer, by mail, by phone or online.
What is the meaning of a Warrant for Distraint?
In Montana’s terms, this name refers to a tax lien. This statute makes it an order that lets a sheriff or agent levy on and sell property owned by a delinquent taxpayer, under 15-1-701 MCA. Once it is filed, the lien reaches real and personal property in that county, along with bank funds, wages and investment accounts.
A warrant gets filed in district court and it holds the same legal weight as a judgment. Where a warrant is filed, a home sale can be affected in that county. Sale proceeds pay the tax debt first. The only way to satisfy a lien is to pay the debt in full.
How can I ask Montana for a payment plan?
A tax professional or a family member assisting you must keep a Montana Power of Attorney on file before discussing your balance. Sending it through TAP works as well.
- The department’s online tax website is called the TransAction Portal (TAP). Set up an account on that site.
- Have your account number or the Letter ID from your notice ready.
- Email the Collections Services Bureau or use TAP, so the two of you can agree on the plan.
- Answer any bureau letter or call soon, since not responding may lead to further collection steps.
Penalties and interest under Montana law
A late payment carries a 0.5% monthly penalty. Under law 15-1-216 MCA, that penalty cannot exceed 12% of the tax. If you pay the tax and interest within 30 days of the first notice, that penalty can be waived.
Interest grows each day and the count starts on the original payment due date. With individual income tax, the annual rate equals the IRS underpayment charge for the third quarter of the prior year. Most other taxes apply a rate that is 3 percentage points higher than the bank’s prime rate.
Garnishment, levies and third party collectors
Once a warrant is filed, the bureau can take action. For 120 days, the bureau can garnish part of your wages or it can take funds from a bank account for all past-due amounts. The debt may be lowered with money paid by state and federal agencies, which includes refunds. Unpaid accounts may be sent to Professional Credit Services, an outside agency.
A hearing may be requested from the district court when seized funds are exempt. You have to do this within ten working days of the notice. To dispute a lien or a seizure, send the Request for Informal Review, Form CB-1. Provide three months of bank statements and pay stubs.
Owing both Montana and the IRS at once
Because Montana’s standard plan is capped at 12 months, your state payment can easily be the larger of your two monthly bills. Handle the IRS agreement as its own separate deal, with its own due date.
States close by
Owe money to both DOR and the IRS?
Does paying Montana take more than 12 months? Do you also have money owed to the IRS? A longer plan can be weighed against the chance of a lien by a licensed tax pro on a free call.
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