The Taxation Committee of the State Bar of Montana BETTR (Business, Estates, Tax, Trusts, Real Estate) Section, for which I am Chair, had the opportunity to hear from Danielle Pennington, Collections Bureau Chief of the Montana Department of Revenue (“MDOR”) in February 2023.
Ms. Pennington addressed many questions about MDOR tax collections, which may be useful for a tax practitioner in Montana to know. Some of her points concerning Montana tax collections follow :
- MDOR prefers that income tax installment agreements for Montana income tax liability not exceed two years. Author Note: I have obtained three-year installment agreements, but in those cases the MDOR required a financial statement and increased tax negotiation.
- MDOR does not have a program called “offer in compromise” such as the IRS has to settle tax liability for less than the balance owed. However, the MDOR does have settlement agreements that serve a similar purpose.
- MDOR does not collaborate with the IRS for tax collections. However, MDOR will consider and review the materials the taxpayer has submitted to the IRS for use in resolving state tax collections. The agencies may collaborate on obtaining tax refunds to pay outstanding taxes.
- MDOR does not prosecute tax fraud or evasion for state income taxes. However, it can refer such cases to the Montana Department of Justice and has done so several times.
- When delinquent income tax has not been paid for 70 days, MDOR will send a delinquency notice. Taxpayers will typically receive at least two notices.
- MDOR’s version of a tax lien is called a warrant for distraint. MDOR files warrants for distraint in order to levy on wages and bank accounts. While MDOR could pursue collection against personal property, it does not presently do so due to the practical challenges of levy and sale.
- Warrants for distraint are valid for 10 years. MDOR may renew a warrant for distraint for an additional 10 years. Otherwise, there is no statute of limitations for MDOR income tax collections.
- MDOR can waive late payment penalties for good cause shown. It does not waive interest. Interest may only be addressed through a settlement agreement.
- MDOR equivalent to innocent spouse relief is not handled by MDOR’s Collections Bureau; rather, innocent spouse relief is handled by MDOR’s Business and Income Taxes Division. Author Note: I obtained innocent spouse relief one time from the MDOR using the MDOR taxpayer advocate.
- MDOR has a taxpayer advocate who can assist in resolving some tax disputes. Sheila Stevens is the current MDOR taxpayer advocate.
Taxpayers with significant Montana tax liabilities may contact Jared Le Fevre to discuss options for resolving the liabilities.
About the Author. Jared M. Le Fevre is a tax attorney and received a Tax LLM degree from the University of Alabama College of Law and a Juris Doctorate from the University of Utah College of Law. Mr. Le Fevre is a Partner in the Tax, Trusts and Estates Practice Group of Crowley Fleck PLLP. Mr. Le Fevre represents taxpayers before the IRS, IRS Independent Office of Appeals, Tax Court, Federal District Court and state tax agencies throughout Montana, Wyoming, North Dakota, Idaho, and Utah. Mr. Le Fevre is involved in federal, state and local tax audits, appeals, and tax resolution throughout these western states. Mr. Le Fevre also advises clients on the tax effects of business and real estate transactions.
Date of information: May 9, 2023.
- This is not legal advice: The information provided herein is for general informational purposes only and does not, and is not intended to, constitute legal advice. While we attempt to ensure that the information contained on this website has been obtained from reliable sources, we are not responsible for any errors or omissions, or for any results obtained from the use of this information. All information on this website is provided “as is” and has no guarantee of completeness, timeliness, or accuracy. No one should take action in reliance on the information contained on this website and we disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this site to the fullest extent permitted by law. Any links to other third-party websites are only for the convenience of the reader and we do not recommend or endorse the contents of such sites.
- Seek competent representation: Due to the often-complex nature of tax issues, we recommend anyone with questions about a particular legal matter seek competent legal and financial representation. Nothing on this website is an offer to represent you, and the use of, and access to, this website or any of the links or resources which may be contained within the site do not create an attorney-client relationship between the reader and Crowley Fleck, PLLP, or any of its attorneys. The content of any unsolicited communications sent to Crowley Fleck, PLLP, or to any of its attorneys, will not create an attorney‑client relationship and the contents of such unsolicited communication shall not be considered confidential.
- The views expressed are individual: The views expressed on, or through, this site are those of the individual authors writing in their individual capacities only – not those of Crowley Fleck, PLLP.
- No advertisement or solicitation: This website is not intended as advertising or as solicitation for legal services.
- No client information: The information herein does not contain confidential or otherwise private information about current or former clients of Crowley Fleck, PLLP and any similarities between hypothetical situations presented herein and current or former client circumstances is purely coincidental.
 These points come from the notes taken by the author of this article based on the presentation made by Ms. Pennington. They have not been reviewed or separately confirmed by Danielle Pennington. Any mistakes are solely attributable to the author.