Like it or not, taxes are the lifeblood of a nation. It helps fuel our government in order for it to function properly and efficiently.

While paying taxes is one of our duties as citizens, there are always instances when the IRS or a State taxing authority overreaches. This may come in the form of assessing an improper amount of tax, improperly applying the provisions of the state tax statues as well as many other injustices, which can drastically affect a person’s life.

If you ever find yourself in as unenviable position as this one, it is imperative to know the legal remedies that the law affords you as a taxpayer. If you are a New Jersey resident and find yourself on the brink of insanity with an issue related to the New Jersey tax laws and regulations, it is helpful to know the New Jersey Tax Court Procedure for state tax cases. This way, you’ll have the best chance of properly asserting your legal rights in Tax Court.

According to the Rules Governing Practice in the Tax Court of New Jersey, the Tax Court has initial jurisdiction over all final decisions including any act, action, proceeding, ruling, decision, order or judgment – including the promulgation of any rule or regulation of a County Board of Taxation, the Director of the Division of Taxation, any other state agency or official (including the Motor Vehicle Commission), or any county or municipal official with respect to a tax matter. This means that the Tax Court of New Jersey is where you should first seek legal recourse for any tax-related issues pertaining to the implementation and application of the tax laws and regulations of the state.

At first blush, commencing a state tax case in New Jersey may appear daunting. But a more in-depth look at the entire process will help you get a better idea and appreciation of the matter.

Seeking legal recourse against the state in a tax controversy begins by commencing an action before the Tax Court of New Jersey. According to the Rules Governing Practice in the Tax Court, an action may be commenced by filing a complaint with the clerk of the Tax Court in response to either a Notice of Assessment or a Final Determination which has been issued to the aggrieved taxpayer.

The complaint filed by the taxpayer should contain the claim for relief as well as the facts which form the basis of the claim. For State Tax cases, the complaint should clearly set forth all of the allegations and be separately numbered according to paragraphs. As much as possible, the allegations should be in simple, concise and direct terms. Other essential items which must not be left out of the complaint include the Case Information Statement, a copy of the Notice of Assessment or Final Determination which is the subject matter of the complaint, whether or not the amount involved in the controversy exceeds $5,000 and proof of service, which must simultaneously be submitted when filing the complaint unless the complaint is served by mail or it is not effected initially. In the case of the latter, the proof of service must be submitted when the service has already been effected.

Taking a small digression into “service of the complaint,” complaints involving State Tax cases must be served on both the Division of Taxation and the New Jersey Attorney General’s Office. According to the Rules Governing Practice in the Tax Court, service may only be made either personally or by certified or registered mail.

For State Tax matters, complaints filed in the Tax Court should be made within 90 days after the date of the action which is sought to be reviewed. For example, if a Final Determination was issued by the Division of Taxation on May 8 but was not received by the taxpayer until May 10, the 90-day period for filing a complaint in the Tax Court involving the Final Determination begins to run from May 10, which is the date of actual receipt.

The dates of receipt of a Notice of Assessment or a Final Determination are significant when it comes to calculating the 90-day period for filing a complaint with the Tax Court. The taxpayer must assert his or her legal rights in court by filing a complaint within the 90-day period, otherwise the gates of the courthouse will forever be closed. In other words, if a complaint is filed “out of time,” the Tax Court will no longer have jurisdiction over the matter.

In certain circumstances, the Division of Taxation may require the taxpayer to post a bond equal to the amount of the proposed tax assessment. This only happens in the event that the Division of Taxation determines that the taxpayer may not be able to satisfy the tax assessment which is the subject matter of the controversy. Failure to adhere to these requirements results in the continued enforced collection of the assessment against the taxpayer by the Division. This includes the filing of a Certificate of Debt which is a license that allows the Division to unleash a panoply of unpleasant remedies, including the collection of the amount in the tax assessment which may be had or taken upon the recovery of a judgment in an action.

The adverse party in the complaint may file an answer. If so, it should be done within 60 days after the service of the complaint. However, if you have missed the deadline all hope is not lost. A safe-harbor may extend the period for an additional sixty days upon the consent of the plaintiff’s counsel.

Once the answer has been served, discovery may be exchanged in order to expedite the proceedings. The court will set deadlines for exchanging discovery, which the parties must strictly adhere to as these deadlines often mean the difference between whether evidence will be admissible at trial or whether it will be inadmissible.

A pre-trial conference may then be scheduled between the parties after which a pre-trial memorandum will be prepared. Proposals to settle the controversy amicably between the parties may be made but it should be in writing and properly addressed to the Deputy Attorney General who is assigned to the matter. If no settlement is reached, then a trial date will be set.

These are the basic steps that are essential to know when it comes to asserting your legal rights in a civil tax controversy in the Tax Court of New Jersey. I’d love to hear from anyone who has had a case docketed in the Tax Court of New Jersey and what that experience was like for you.