Missouri Revised Statutes § 32.378 - Compromise of taxes, interest, penalties, or additions to the tax, when — taxpayer agreements and duties — statute of limitations if compromise agreed upon — director's duties — rulemaking authority

32.378. Compromise of taxes, interest, penalties, or additions to the tax, when — taxpayer agreements and duties — statute of limitations if compromise agreed upon — director's duties — rulemaking authority. — 1. In addition to the authority granted to the director of revenue and the administrative hearing commission pursuant to section 32.375, the director of revenue may agree to compromise any tax, interest, penalties or additions to tax assessed or collected by the director of revenue on any of the following grounds: (1) Doubt as to liability, which exists in any case where there is a genuine dispute as to the existence or amount of the correct tax liability under the law; (2) Doubt as to collectibility, which exists in any case where the amount assessed including interest, additions to tax and penalties exceeds the taxpayer's ability to pay as defined by regulations promulgated by the director of revenue; or (3) To promote effective tax administration which means that compromise of the liability will not undermine compliance by taxpayers with the tax laws and that: (a) Collection of the full liability will result in severe economic hardship to the taxpayer; or (b) Regardless of the taxpayer's financial circumstances, exceptional circumstances exist such that collection of the full liability will be detrimental to voluntary compliance by taxpayers. Such exceptional circumstances include, but are not limited to, instances where the taxpayer's failure to pay the taxes assessed is the result of circumstances beyond the reasonable control of the taxpayer and is not the result of negligence on the part of the taxpayer, or instances where a reasonable person would not have expected the assessment based on previous policy of the department of revenue or information provided to the taxpayer by the department of revenue. 2. As part of the consideration for any compromise of taxes that is based on subdivision (2) or (3) of subsection 1 of this section, the taxpayer shall agree: (1) That the state of Missouri shall keep all payments and other credits applied to the tax, interest, penalties or additions to tax for the periods covered by the offer; (2) That the state of Missouri shall keep any and all amounts otherwise due the taxpayer as a result of overpayments of any tax or other liability, including interest, additions to tax and penalties, for periods ending before or as of the end of the calendar year in which the offer is accepted; except that the state shall not keep any amounts that, together with amounts already paid on the compromise, exceed the liability compromised; (3) That the taxpayer shall have no right to contest in court or otherwise the amount of the liability compromised; (4) That the taxpayer shall bear his or her own costs, including any attorney fees; (5) That during the three-year period beginning with the date of the compromise, the taxpayer shall comply with all tax obligations arising from issues or transactions related to the issues or transactions that were the basis of the tax that is the subject of the compromise and that the taxpayer shall not challenge or protest any such tax obligations arising during the three-year period; however, any statutory changes that become effective during the three-year period shall apply to the taxpayer notwithstanding this provision of the compromise; (6) That if there is a default in payment of any principal or interest due under terms of the agreement of compromise, or if the taxpayer fails to comply with the provisions of the agreement set forth in subdivision (5) of this subsection, the director of revenue may: (a) Proceed immediately by suit to collect the entire unpaid balance of the amount agreed upon; or (b) Proceed immediately by suit to collect as liquidated damages an amount equal to the liability compromised, minus any payments already received under the terms of the agreement, with interest on the unpaid balance from the date of default; or (c) Disregard the amount of the compromise and apply all amounts previously paid under the agreement against the amount of the liability compromised and assess and collect by levy or suit the balance of the liability. If the director chooses this option, the taxpayer shall have the right to contest in court or otherwise the amount of the liability compromised. 3. The director's remedies under this section are cumulative and the director may pursue any combination of such remedies together or consecutively until the entire liability is paid. No action or inaction by the director shall constitute a waiver or election not to pursue any remedy granted by this section. 4. The taxpayer requesting to compromise payment of taxes, interest, additions to tax, or penalties shall provide any information reasonably requested by the director in order that the director may determine that the offer is made in good faith. 5. If compromise of taxes is agreed upon, any statute of limitations applicable to the assessment and collection of the liability compromised shall be tolled during the period beginning on the date of the compromise and ending one year after the last payment is due pursuant to the agreement. 6. The director's decision to reject or accept an offer of compromise under this section shall be based on consideration of all the facts and circumstances, including the taxpayer's record of overall compliance with the tax laws. Notwithstanding any provision of law to the contrary, the director's decision shall not be subject to review by the administrative hearing commission or any court. 7. The director shall prescribe guidelines for employees of the Missouri department of revenue to determine whether an offer-in-compromise is adequate and should be accepted to resolve a dispute. 8. The director shall establish procedures for an independent administrative review of any rejection of a proposed offer-in-compromise made by a taxpayer pursuant to this section before such rejection is communicated to the taxpayer. 9. The provisions of this section shall not apply to the resolution of any dispute of tax liability in accordance with section 32.375. 10. Any rule or portion of a rule, as that term is defined in section 536.010, that is created under the authority delegated in this section shall become effective only if it complies with and is subject to all of the provisions of chapter 536 and, if applicable, section 536.028. This section and chapter 536 are nonseverable and if any of the powers vested with the general assembly pursuant to chapter 536 to review, to delay the effective date or to disapprove and annul a rule are subsequently held unconstitutional, then the grant of rulemaking authority and any rule proposed or adopted after August 28, 2002, shall be invalid and void. (L. 2002 H.B. 1150, et al.) Effective 7-01-02