Form Mo-656 - Missouri Department Of Revenue (Page 3 of 6) in pdf

3. Effective Tax Administration; Severe Economic Hardship:

a.) Must be fully filed on all required tax years for all tax types.

b.) Must not have an open bankruptcy proceeding.

c.) Must be current on all estimated tax payments if the taxpayer is required to make estimated tax payments.

d.) Offer in Compromise payment plans must be through Electronic Funds Transfer (EFT) or credit card.

e.) Must complete Sections 1 through 5 of the MO-656. If self-employed or own a business; must complete

Sections 1, 2,and 4 through 8.

4. Effective Tax Administration; Exceptional Cirmumstances:

a.) Must complete Section 1 of the MO-656.

b.) Must provide a written statement explaining circumstances.

Is professional assistance required to submit an offer?

Taxpayers are welcome to seek tax assistance from a tax professional, but it is not a requirement.

How does the Offer in Compromise process work?

When the Department receives a taxpayer’s offer, it is reviewed to determine if all of the required documentation has

been submitted and all criteria for submitting an offer have been met. If all documentation is not submitted, docu-

mentation is not complete, or if the MO-656 forms are not signed and dated, a letter will be sent requesting additional

information. Each offer is considered on an individual basis and can be submitted for one of the following reasons:

1. Doubt as to Liability (I do not believe I owe this tax.): The taxpayer or entity must provide sufficient

documentation to establish that there is substantial doubt regarding the taxpayer’s liability and reasonable

cause for failure to produce such documentation earlier in the collection process.

2. Doubt as to Collectibility (I agree I owe the tax, but cannot pay.): The taxpayer or entity must provide

documentation that demonstrates an inability to pay the liability in full. The amount offered must be the

maximum amount the taxpayer can pay, taking into consideration future earning potential and total equity

in all assets.

3. Effective Tax Administration:

(a) Severe Economic Hardship - Collection of the full liability will result in severe economic hardship to

the taxpayer.

If the Offer in Compromise is based on this reason, the Offer in Compromise

Application (MO-656) with the applicable sections completed must be included.

(b) Exceptional Circumstances - Regardless of the taxpayer’s financial circumstances, exceptional

circumstances exist that make collection of the full amount detrimental to voluntary compliance

include, but are not limited to;

(i) the taxpayer failed to pay because of circumstances beyond the reasonable control of the

taxpayer and not the result of negligence on the part of the taxpayer or;

(ii) a reasonable person would not expect the assessment based on previous policy of the

Department of Revenue or information provided to the taxpayer by the Department of Revenue.

What happens when a decision is made?

When a decision is made, the taxpayer will be notified in writing. If the offer is accepted, the taxpayer must remain

compliant on all Missouri tax filings and payment requirements for three years from the date the offer is accepted.

If the taxpayer does not remain compliant, the negotiated amount will be retracted and the original balance due

plus additional interest, less payments made, will then be owed. The Department will also offset state and federal

refunds for tax periods through the tax year that the offer is accepted. An offset does not reduce the accepted Offer

in Compromise amount.

Once an offer is accepted and paid according to the terms of the offer, any enforced collection activity such as

liens and levies issued against the taxpayer who submitted the offer will be released. Failure to remain in compli-

ance will result in the default of the offer and the Department will require payment of the original balance due plus

additional interest, less payments made.

The law does not provide for an appeal of a rejected offer. The taxpayer must make payment arrangements to

pay the debt. If this is not done, the case will be referred for further collection actions to collect the debt in full.

Where do I submit the offer?

Collections Enforcement

P.O. Box 1646

Jefferson City MO 65105-1646

Phone (573) 751-7200

Fax (573) 522-3218

Form Mo-656 - Missouri Department Of Revenue Page 3

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