Minnesota Tax Relief Guide to Resolving Unfiled & Unpaid Taxes

The Minnesota Department of Revenue is in charge of managing the state’s revenue system and ensuring that all individuals, businesses, and entities comply with state tax laws. The collection of these taxes funds public services for the state.

Payment Agreements

If you are unable to pay your state taxes owed in full, you can set up a payment agreement with the Minnesota Department of Revenue by either using the Department’s e-Services payment agreement system or by contacting the Department directly. You must pay a nonrefundable $50 fee in order to enter into a payment agreement, whose terms and conditions are based on your circumstances and your ability to repay your liability. All installment payments must be made by electronic funds transfer (EFT) unless you do not have a bank account and you are unable to establish a bank account. A formal payment agreement cannot last beyond five years.

You must complete Form C58P, Personal Financial Statement, in order to apply for a payment agreement, so that the Department can properly evaluate your ability to pay your liability. The Department also may file a lien in order to secure payment of your taxes owed.

Compromise Minnesota Tax Liability

When you are unable to pay your state taxes owed in full, the Commissioner of Revenue and the Attorney General’s Office may agree to compromise your taxes owed when it is in the state’s best interest to do so. This means that you would pay a single payment toward your taxes owed that is actually less than what you owe. In order to request a compromise, you must complete Form C58C, Compromise Applreveication, which consists of a questionnaire and a financial statement, and include a $250 nonrefundable application fee, which is applied to your taxes owed whether or not the Department accepts your proposed compromise. Your compromise proposal must detail when you are able to make the compromise payment, the amount of your payment, the sources of funds that you will use for the payment, and reasons why your compromise offer should be accepted. In considering your compromise request, the Department will consider the following factors:

• Age of the liability and how long the Department has to legally collect it
• Your assets and earning potential
• Your age and health
• The Department’s potential to collect the liability in full
• The existence of any other liable party, such as a spouse
• The breakdown of tax, penalty, and interest for the balance due
• Any previous collections actions and your overall collection history
• Amount that you have paid toward the liability to date
• Whether the liability is dischargeable in bankruptcy, and past or current bankruptcies
• Whether it is your first offer of compromise or a reconsideration of a previous offer
• Whether you are current in filing all of your income tax returns
• Whether any doubt exists as to whether you owe the taxes owed

Taxpayer Rights Advocate

The Commissioner of Revenue established the Taxpayer Rights Advocate Office in order to help people who are having trouble resolving tax issues with the Department of Revenue. In most cases, employees of the Department of Revenue should be able to help you solve your problems. However, if you have exhausted all other administrative remedies, and still cannot resolve your tax problem, you can contact the Taxpayer Rights Advocate as follows:

Telephone: (651) 556-6013, 8:00 a.m. – 4:30 p.m., Monday –  Friday
Mail: Taxpayer Rights Advocate Office, PO Box 7335, St. Paul, MN 55107-7335

You can also contact the Taxpayer Rights Advocate by email at DOR.taxpayeradvocate@state.mn.us.

Our Simple Tax Relief Process