Missouri Back Taxes Settlement Guide: Methods to Settle Taxes

The Missouri Department of Revenue processes individual income taxes and some other kinds of taxes. The Department is the central collection unit for all state revenue. In addition to collecting taxes, the Department licenses drivers and titles and registers motor vehicles for the state of Missouri.

Installment Agreements

If you cannot pay your state taxes owed in full, you can set up an installment payment plan that allows you to pay your taxes owed off through equal monthly payments. The number of your installment payments will depend on the amount of taxes that you owe, and your ability to pay your taxes owed off within a reasonable amount of time. You can make your monthly payments using a credit card, an electronic funds transfer (EFT) from a bank account, or a personal check.

You can set up an installment agreement online through the Internet Installment Agreement page on the Missouri Department of Revenue website. If you have any questions about installment agreements, you can call the Department of Revenue Customer Assistance at (573) 751-7200.

Offer in Compromise

An offer in compromise is an agreement that a taxpayer enters into with the Missouri Department of Revenue to settle a taxpayer’s outstanding taxes owed for less than the full amount that is owed. The Department of Revenue will only accept an offer in compromise if it does not believe that you can pay your taxes owed in full in a single payment or through an installment payment plan.

You must exhaust all other potential payment options before the Department of Revenue will consider an offer in compromise, which can be proposed for three different reasons:

Doubt as to liability – There is a legitimate doubt that your taxes owed is correct, either based on a mistake interpreting the law, a failure to consider your evidence or new evidence that has come about.

Doubt as to collectability – There is doubt that you could ever pay the full amount of the taxes owed within the Department of Revenue’s legally allowable collection period.

Effective tax administration:

• Collection of the full tax from you would result in severe economic hardship. If you use this reason, you must submit a completed Collection Information Statement, Federal Form 433-A and all attachments, including your three most recent months of income and earnings statements, bank account statements, life insurance policies, loan statements, bills, credit card statements, federal tax return, child support orders, etc.
• Exceptional circumstances exist so that your failure to pay the assessed taxes if beyond your reasonable control and not the result of your own negligence.
• Exceptional circumstances exist so that a reasonable person would not expect to owe the tax based on previous policy of the Department of Revenue or information provided by the Department of Revenue.

In order to propose an offer in compromise, you must complete and submit Form MO-656 to the Department of Revenue. Your proposal must include the sum of money that you can pay toward your taxes owed, as well as the reason for your proposal, based on at least one of the reasons stated above.

In considering your offer in compromise, the Department of Revenue will determine the reasonable collection potential of your taxes owed, based on:

• Your ability to pay
• Your available assets, including real estate, automobiles, bank accounts, and other property
• Your anticipated future income
• Your basic necessary living expenses

Department of Revenue Ombudsman / Taxpayer Rights Advocate

You can seek help from the ombudsman or taxpayer rights advocate through the Department of Revenue if you have a complaint or tax problem that you have been unable to resolve through all other administrative solutions or channels. If you have done everything possible and still are unable to resolve your problem, the ombudsman can help resolve your tax issue. You can contact the ombudsman at: (573) 526-3872.

Our Simple Tax Relief Process