Missouri Payroll Tax Nonpayment Emergency
Checklist
What This Issue Means
Missouri employer withholding tax nonpayment means that an employer has failed to deliver withheld employee state income taxes to the Department of Revenue by the legal deadline.
Under RSMo 143.191, employers must withhold Missouri income tax from employee wages and remit those funds on a fixed schedule determined by the amount withheld.
When these payments are not made on time, the employer owes the state the full amount plus penalties and interest calculated from the original due date. RSMo 143.241 establishes that any amount of tax actually deducted and withheld by an employer is a special fund in trust for the
Director of Revenue, making the employer personally liable for the tax.
Why Missouri Requires This
Employers are required by Missouri law to remit withholding taxes because these funds represent employee money held in trust, not employer funds. Common triggers for nonpayment include cash flow problems, accounting errors, business closures, changes in payroll processing, or a misunderstanding of payment deadlines. Missouri enforces this requirement through a specific statutory notice sequence that begins automatically when the Department detects nonpayment.
Missouri’s Collection Notice Sequence
Understanding Missouri’s official notice progression helps you identify where you are in the
collection process and what deadlines apply
- The non-filer notice informs employers that a required withholding tax return has not
been received by the Department.
- A balance due notice indicates the Department received a return showing a balance
due, but did not receive payment in full.
- An assessment of unpaid withholding tax serves as the statutory notice under RSMo
143.631 that formally assesses tax, interest, and additions owed to the Department.
- The ten-day demand notice provides your last opportunity to resolve your account before
the Department escalates collection actions.
- A notice of intent to offset warns that your federal income tax refund may be intercepted
and applied to the Missouri debt.
- The notice of tax lien confirms that the Department has filed a certificate of tax lien
against your real or personal property.
- Referral to a collection agency indicates that unpaid taxes have been transferred to
Penn Credit, the collection agency serving the Department.
The Critical 60-Day Protest Period
The assessment of unpaid withholding tax represents the most important notice in Missouri's collection sequence. You have 60 days from the notice date to file a written protest with the
Missouri Department of Revenue explaining why you do not owe the amounts shown.
If you live outside the United States, you have 150 days to file a protest. After this deadline passes, the assessment becomes final, and you can no longer protest the underlying tax debt through administrative procedures. Missing this deadline eliminates your right to administrative appeal and leaves only limited remedies, such as payment or payment plans.
Penalties and Interest Under Missouri Law
Missouri imposes a 5 percent addition to tax per month for failure to file a withholding tax return, up to a maximum of 25 percent of the unpaid balance. For failure to timely pay withholding tax,
Missouri adds 5 percent to the tax amount due under RSMo 143.751(3).
Interest accrues on unpaid withholding taxes at an annually adjusted rate determined by RSMo
32.065, equal to the adjusted prime rate charged by banks, rounded to the nearest full percent.
For 2023, the interest rate was 6 percent. You can calculate your exact interest and additions to tax using Missouri’s online calculator at
https://mytax.mo.gov/rptp/portal/home/addition-tax-int-calculator.
Personal Liability for Withholding Tax
Every employer required to withhold Missouri income tax is personally liable for the tax under
RSMo 143.241 and 12 CSR 10-2.015. This is not conditional liability that applies only under certain circumstances.
Missouri’s Employer’s Tax Guide Form 4282 explicitly states that an employer required to withhold Missouri income tax is personally liable for the tax, and any amount actually deducted and withheld is a special fund in trust for the Director of Revenue. Personal liability survives the administrative dissolution of a corporation or revocation of a foreign corporation’s certificate of authority.
What to Do After Receiving a Notice
1. Locate and review all notices from the Missouri Department of Revenue related to withholding taxes, noting the notice type, tax period covered, amount owed, and any response deadline.
2. Calculate the full amount owed by identifying the original tax amount due, noting the 5 percent per month penalty, calculating interest from the original due date, and confirming the total current balance as of the notice date.
3. Contact the Missouri Department of Revenue at 573-751-8750 or withholding@dor.mo.gov to discuss the notice and explore available options.
4. If you received an assessment of unpaid withholding tax and disagree with the amount, file a written protest within 60 days (150 days if outside the U.S.) explaining why you do not owe the amounts shown and including supporting documentation such as payroll ledgers or tax returns.
5. Request an Internet Installment Agreement through MyTax Missouri at https://mytax.mo.gov/ if you cannot pay the full balance immediately, providing your
Social Security Number or business tax identification number, your most recent tax notice, including PIN, and bank account information.
6. Document all communication with the Department by recording the date, time, name of the representative contacted, and what was discussed, and keep copies of all payments and payment confirmations.
Tax Lien Procedures and Release Timeline
When the Department files a certificate of tax lien with the circuit court clerk under RSMo
143.902, it has the full force and effect of a default judgment, allowing the Department to collect through garnishment, executions, and levies. A certificate of tax lien may also be filed with the recorder of deeds in any county where you reside or own property, attaching to all real or personal property you own or acquire after filing.
The Department issues a Certificate of Lien Release and Satisfaction within 45 to 60 days after you resolve the balance through full payment or by providing documentation showing you do not owe the debt. Setting up a payment plan does not release a filed certificate of tax lien until you pay the debt in full.
Payment Plan Options
Missouri offers Internet Installment Agreements through the MyTax Missouri system for taxpayers unable to pay the full balance immediately. The length of a payment plan depends on the amount owed and your ability to pay, determined through individual negotiation with the
Department.
While Missouri does not publish rigid standardized payment plan terms, the application process and general criteria are publicly documented on the Department’s Payment Options webpage.
You must make payments on or before each deadline specified in any approved agreement, as missing a payment may result in cancellation of the plan and the full balance becoming immediately due.
Referral to Collection Agency
Unpaid withholding taxes may be referred to Penn Credit, the collection agency serving the
Missouri Department of Revenue. Once your account is referred to a collection agency, you must contact Penn Credit directly to resolve your account if you cannot make full and immediate payment to the Department.
Missouri statutes allow a 100 percent civil penalty and criminal prosecution for willful attempts to evade the tax. Criminal prosecution for willful tax evasion is handled by prosecuting attorneys, not a routine referral to the Missouri Attorney General’s Office.
Common Mistakes to Avoid
Missing the 60-day deadline to protest an assessment of unpaid withholding tax eliminates your right to administrative appeal. Failing to respond to follow-up notices can trigger acceleration of collection actions, including liens and referral to collection agencies.
Not keeping proof of payment, such as bank statements or payment confirmations, makes it difficult to verify that payments were credited correctly. Continuing to withhold taxes from employee paychecks without remitting them to the Department compounds the problem and increases personal liability. Assuming that contacting the Department automatically stops collection actions without obtaining written confirmation may result in continued enforcement measures.
Facing State Enforcement or Payroll Tax Issues?
If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.
We help with
- State enforcement actions and notices
- Payroll tax debt review and resolution
- Penalty and interest reduction options
- Payment plans and compliance solutions
- Representation before state tax agencies
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