Updated: August 13, 2024

By: Kari Brummond, EA|Reviewed by: Charles P. Corsello, EA

Missouri Tax Resolution Options & Consequences of Owing Taxes

The Missouri Department of Revenue (DOR) collects state income tax, corporate and franchise tax, sales and use tax, and other personal and business taxes. If you don't pay your state taxes, the DOR can issue liens, seize assets, garnish wages or bank accounts, or take other collection actions. The state may also send your account to a collection agency or a prosecuting attorney.

Here's what to expect if you have unpaid taxes in Missouri. This guide outlines the state's tax resolution options and then looks at what can happen if you don't pay your taxes.

Missouri Back Taxes | Help with Missouri Back Taxes

Tax Resolution Options in Missouri

If you have unpaid taxes in Missouri, you should try to make arrangements before the state starts collection actions on your account. The state offers several options for taxpayers with outstanding liabilities.

Payment Plans on Missouri Tax Liabilities

The Missouri DOR offers payment plans to individuals and businesses that cannot pay their taxes in full. Missouri DOR calls their payment plans Internet Installment Agreements. Missouri's tax payment plans allow you to pay off your tax bill in monthly installments over 24 months.

You can sign up online or by calling the MO DOR at (573) 751-7200. Make sure you have your Social Security Number and the PIN from your notice.

Missouri Offer in Compromise

An offer in compromise lets you settle your tax bill for less than you owe. Missouri will accept offers in compromise on some tax liabilities but only if the amount offered reflects the account's reasonable collection potential (RCP).

RCP refers to the most money the state is likely to be able to collect. The state looks at all your assets, income, and future income, and then it makes a small number of allowances for living expenses. Obtaining an offer in compromise is a long and detailed process, and you may want to work with a tax professional.

Innocent Spouse Relief

The MO DOR does offer some relief for people who filed returns jointly, but it does not refer to the program as innocent spouse relief. If you want to split the unpaid tax liability on a jointly filed state tax return, you need to contact the DOR directly.

Hardship Status

If the MO DOR garnishes your wages or your bank account, you may apply for hardship status to get the garnishment stopped or reduced. To apply, you need to complete Internal Revenue Service Form 433-A for individuals or Form 433-B for businesses and include three months' worth of financial documents.

The state also offers a short offer-in-compromise application if your income is 125% of the federal poverty level. You may also use the short form if your income is 200% of the federal poverty level and you're on a fixed income, receive public assistance, or have significant medical issues.

Penalty Abatement

Tax penalties in Missouri can be significant. State law allows the DOR to add a 100% penalty for employers who willfully attempt to evade income tax or sales or use tax. Individuals can face penalties of up to 30% of their tax liability. Unfortunately, however, the state does not advertise any penalty abatement programs.

You may be able to have penalties abated through the offer-in-compromise program, or a tax professional may be able to help you get penalties removed from your account.

Appeals Process for Missouri State Taxes

If the state adjusts your tax bill, you will receive an Assessment of Unpaid Tax. You can dispute the amount due by filing an official protest within 60 days. You have 150 days if you are outside of the United States. The state will review your account and issue a Final Determination.

At that point, you have 30 days to file an appeal with the Administrative Hearing Commission (AHC). If you disagree with the AHC's determination, you have another 30 days to appeal your case through the state court system.

Missouri Tax Amnesty Program

At the time of writing, Missouri does not have an active state tax amnesty program. The state last offered tax amnesty in fall 2015. Amnesty programs allow taxpayers to come forward and pay unpaid taxes without facing penalties or prosecution.

Missouri DOR Voluntary Disclosure Program

The MO DOR offers a voluntary disclosure program. If the MO DOR has not contacted you about the back taxes you owe, you may be able to use this program to file and pay. You can apply using Form 5310 (Application for Voluntary Disclosure Agreement).

If you make a voluntary disclosure, the state will not assess penalties on your account, and the MO DOR will only consider the last four years. However, if you have collected taxes from customers and not remitted them, the state will look back further than four years. Additionally, you cannot use this program if you have filed a return but underreported taxes.

Consequences of Back Taxes in Missouri

The MO DOR uses a range of collection actions to deal with unpaid taxes, and the state will continue to pursue the tax liability until it is paid in full. Even if you anticipate a tax refund that could cover your outstanding tax liability, the state will still not pause collection actions.

Here are some of the measures Missouri uses to collect unpaid tax bills.

Missouri Department of Revenue Contact Information

General Inquiries (Individuals and Businesses): 573-751-3505
Business Taxes: 573-751-5860
Collections: 573-751-3505
Website: Missouri Department of Revenue

Missouri Tax Liens

A tax lien is a legal claim to your property. The MO DOR can attach liens to your real or personal property if you have unpaid state taxes. A lien can stop you from selling or transferring property until you have resolved the liability. If you sell property with a lien attached, the proceeds go to the lienholder.

To get the lien removed immediately, you can pay the tax in full with a cashier's check, money order, guaranteed bank check, or an escrow check. If you pay by any other method, the state will take six to eight weeks to remove the lien.

Garnishment for Tax Liabilities in Missouri

In Missouri, the state can garnish your wages or bank accounts for unpaid taxes. If the courts order a garnishment, your financial institution or employer will have to send your money to the DOR.

The MO DOR is legally allowed to garnish up to 100% of the funds in your bank account and your wages. However, in most cases, the state only garnishes 25% of your net pay, which is your pay after deductions such as taxes, healthcare premiums, and retirement contributions.

Tax Penalties

The MO DOR assesses a 5% penalty per month up to 25% of the unpaid balance if you don't file your tax return on time. The state also charges a one-time 5% penalty if you pay your taxes late. MO DOR assesses both penalties the first day you are late.

For example, if you file your return and pay your tax a day late, you will face both a 5% failure-to-file penalty and a 5% failure-to-pay penalty. On a $1000 tax bill, these penalties are $100.

In contrast, if you pay and file your return six months late, you face the maximum failure-to-file penalty of 25% plus a 5% failure-to-pay penalty. This brings your penalty to $300 on a $1,000 tax bill.

The MO DOR also assesses simple interest on your account. As of 2021, the interest rate is 3%. You can use the state's calculator to determine the interest and penalties on your outstanding balance.

Other Tax Collection Enforcement Actions

If you have unpaid taxes in Missouri, the state can claim your federal and state tax refunds. If your business owes sales tax, use tax, corporate income tax, or withholding tax, the state may take your personal income tax refund to cover these liabilities.

Notices for Unpaid Taxes in Missouri

If you have unpaid taxes in Missouri, the state will send the following notices:

Balance Due, Adjustment, or Non-Filer Notice — You will receive one of these three notices depending on if you owe a balance, had your return adjusted, or failed to file.
Assessment of Unpaid Tax —The state will send this assessment if you don't respond to the first notice. You have 60 days to appeal before your tax determination becomes final.
10-Day Demand Notice — You have 10 days to respond before the state takes collection actions on your account.
Notice of Intent to Offset — This notice says that the state has taken your state refund to offset liabilities from other state or federal agencies.
Administrative Judgment or Lien — The MO DOR is issuing a lien against your assets.
Garnishment — The state plans to garnish the funds in your bank account or from your wages.
Referral to Prosecuting Attorney or Collection Agency — The state is referring your account to a prosecuting attorney or a collection agency.

If you owe business taxes in Missouri, you will also receive a Revocation of Sales Tax License Notice and a Bond Forfeited Notice. These will come after the garnishment and before the referral to the collection agency.

Statute of Limitations on Missouri Tax Liabilities

The state has three years to assess additional tax. The clock starts on the later of the date you filed the return or its due date. However, if the IRS adjusts your federal return, you are supposed to adjust your state return within 90 days. If you don't, the state can make an assessment after the three-year time limit. Additionally, if you fail to report more than 25% of your income, the MO DOR has up to six years to bill you.

If you don't file or file a fraudulent return, there is no statute of limitations. The MO DOR can bill you for the tax, interest, and penalties at any time.

Get Help With Unpaid Taxes in Missouri

Dealing with unpaid taxes in Missouri can be time-consuming, complicated, and frustrating. To get the best results possible in your situation, you should reach out to a tax professional with experience with the MO DOR.

At TaxCure, we have a directory of quality tax professionals from around the country — contact a Missouri tax pro to get help today. Our unique search and filters will help ensure you find the best professional to help with your unique tax problem. Also, see our list below of top-rated tax professionals in Missouri & by designation type.

Missouri Tax Brackets, Deductions, Deadlines and Resources

Before we get into the details of late taxes, let’s take a moment to discuss the tax brackets, deductions, deadlines and additional resources to help you better understand the overall landscape of Missouri taxes.

Missouri Tax Brackets

Missouri uses a progressive tax system for individual income taxes, meaning your tax rate increases as income rises. As of the latest tax year, Missouri's tax brackets are structured as follows:

$0 to $1,207: $0 tax
Over $1,207 to $2,414: 2.00% of the amount over $1,207
Over $2,414 to $3,621: $24 plus 2.50% of the amount over $2,414
Over $3,621 to $4,828: $54 plus 3.00% of the amount over $3,621
Over $4,828 to $6,035: $90 plus 3.50% of the amount over $4,828
Over $6,035 to $7,242: $132 plus 4.00% of the amount over $6,035
Over $7,242 to $8,449: $180 plus 4.50% of the amount over $7,242
Over $8,449: $234 plus 4.95% of the amount over $8,449

These brackets apply to both single and married filers, although the income thresholds may be updated annually for inflation.

Deductions and Credits

Missouri offers several deductions and credits to reduce your taxable income or tax liability:

Standard Deduction: Similar to the federal standard deduction, Missouri allows a deduction based on your filing status, helping to lower your taxable income.
Personal Exemption: Taxpayers can claim a personal exemption for themselves and dependents, further reducing taxable income.
Property Tax Credit: Also known as the "Circuit Breaker" credit, this is available to certain seniors and disabled individuals based on property taxes or rent paid.
Missouri College Savings Plan (MOST) Deduction: Contributions to a MOST 529 plan are deductible up to certain limits, encouraging education savings.

There are also a handful of new tax deductions for 2024, including:

Business Income Tax Deduction (Section 143.022): Enhancement of the deduction has been increased to 20% for the 2023 tax year. Eligibility Expansion now includes income reported by farmers on the IRS Schedule F and Form 4835, in addition to the existing eligibility for income reported on IRS Schedule C and Part II of Schedule E for partnerships and S corporations.
Employee Stock Ownership Income Tax Deduction Extension (Section 143.114): Program Restart of the Employee Stock-Ownership Program (ESOP) deduction has been reinstated for all tax years starting January 1, 2023, encouraging employee ownership through stock options.
Federal Broadband Grants’ Income Tax Deduction (Section 143.121) has a new deduction that Offers a 100% subtraction from federal adjusted gross income for federal grant money received for broadband internet expansion in underserved areas, applicable to grants received on or after August 28, 2023.
Missouri Farmland Sold to a Beginning Farmer (Section 143.121) has a capital gains deduction for Farmers selling farmland or receiving income from rent, lease, or crop sharing agreements with beginning farmers can deduct a percentage of their capital gains or up to $25,000, for transactions occurring on or after August 28, 2023.
Certification Requirement: A certification from the Missouri Department of Agriculture is required to qualify.

Tax Credits

You may also be qualified for a number of tax credits, with some of those including:

Show MO Act Tax Credit Program (FPC) (Section 135.750) has a program revival and modification tax credit. This tax credit, aimed at motion media and series production projects, has been restarted and renamed the Show MO Act, with eligibility starting from January 1, 2023.
Credit Details: Qualifying taxpayers can receive credits based on actual production expenses, with an annual cap of $16 million divided equally between motion media and series production projects.
Intern & Apprentice Recruitment Tax Credit (Section 135.457) has a new program. Starting January 1, 2024, this program offers a $1,500 tax credit per intern or apprentice, subject to qualifications and an annual cap of $1 million.
Ethanol Retailer and Distributor Tax Credit Program (Section 135.772) has a credit for ethanol sales. Retailers or distributors selling qualified ethanol blend fuels can receive a $0.05 per gallon credit, starting January 1, 2023, with a program cap of $5 million.
Biodiesel Retailer’s Tax Credit Changes (Section 135.775) has enhanced credits. Retail dealers and distributors selling biodiesel blends can claim credits of $0.02 per gallon for blends of 5-10% and $0.05 per gallon for blends of 10-20%, starting January 1, 2023, with a cap of $16 million.
Biodiesel Producer’s Tax Credit Program (Section 135.778) has support for producers. Biodiesel producers in Missouri can claim a $0.02 per gallon credit for fuel produced, applicable from January 1, 2023, with a first-come, first-serve cap of $5.5 million.

You may be eligible for any number of these tax credits, but to be sure, speaking to a tax professional is the best way to determine which tax credits you qualify for.

Filing Deadlines

The deadline for filing Missouri state income tax returns is typically April 15th, coinciding with the federal tax deadline. If April 15th falls on a weekend or holiday, the deadline is extended to the next business day. Taxpayers who request a federal extension automatically receive a Missouri extension, extending the filing deadline to October 15th.

Relevant Resources

Aside from consulting with Missouri tax professionals for help with back taxes, taxpayers have access to a few additional resources for assistance:

Missouri Department of Revenue (DOR) Website: The official DOR website provides tax forms, instructions, and updates on tax laws and policies.
Online Tax Payment Options: The DOR website allows taxpayers to file returns and make payments online.
Missouri Legal Aid: For those who qualify, Missouri Legal Services is a collection of free legal advice services on tax matters, including disputes with the DOR.

Missouri Filing Statuses and Income Level Rules

Missouri's tax system is built around different filing statuses, each with its own set of rules and thresholds. Understanding these statuses can help you accurately determine your tax liabilities and take advantage of any available deductions or credits. Here's a breakdown of the rules for different filing statuses and income levels in Missouri.

Single Filers

Taxable Income: Single filers are subject to Missouri's progressive tax rates, starting from 0% up to the maximum rate based on their taxable income.
Deductions and Credits: Eligible for standard deduction, personal exemptions, and may qualify for other state-specific deductions and credits based on income and personal circumstances.

Married Filing Jointly

Combined Income: Couples who choose to file jointly will have their incomes combined for tax purposes, which could potentially place them in a higher tax bracket but also allows for a higher standard deduction.
Deductions and Credits: Qualify for a doubled standard deduction compared to single filers, along with double personal exemptions. Other deductions and credits may be more beneficial when filing jointly, depending on the couple's combined income and expenses.

Married Filing Separately

Separate Taxable Incomes: Each spouse reports their own income, deductions, and credits separately. This status may benefit couples who wish to keep their finances separate or when one spouse has significant medical expenses or miscellaneous deductions.
Deductions and Credits: Each spouse may claim a standard deduction and personal exemptions for themselves. However, certain credits and deductions may be limited or unavailable compared to filing jointly.

Head of Household

Qualifying Individuals: To file as head of household, you must be unmarried or considered unmarried on the last day of the tax year, have paid more than half the cost of keeping up a home for the year, and have a qualifying person living with you for more than half the year.
Tax Benefits: Offers a higher standard deduction and lower tax rates compared to single filers. This status is beneficial for single parents or individuals supporting other dependents.

Qualifying Widow(er) with Dependent Child

Income and Tax Rates: For two years following the year of their spouse's death, qualifying widow(er)s can file as married filing jointly, allowing them to benefit from the same tax rates and deductions as couples filing jointly.
Eligibility: Must have a dependent child and not remarry within the tax year to qualify for this status.

While most taxpayers, if applicable, will see lower taxes when filing jointly, it’s best to speak to a tax professional to best determine your optimal method of resolving back taxes.