Why Would I Get a Letter From the Missouri Department of Revenue Taxation Division?

Getting a letter from the Missouri Department of Revenue’s Taxation Division can be unsettling, but it doesn’t always mean something is wrong. These letters serve various purposes, such as updating your tax status, requesting additional information, or notifying you of adjustments to your filings. Understanding why you received one is key to resolving any issues quickly.

Underpayment or Delinquent Balances

A notice about unpaid taxes means you have an outstanding balance. This can result from underestimating your tax liability, insufficient estimated payments, or failing to pay the full amount by the deadline. Missouri law (RSMo 143.731) allows penalties and interest on unpaid amounts, increasing the total due over time.

If a balance remains unpaid, Missouri imposes a 5% late payment penalty, with interest accruing at a rate set by the Department of Revenue. In 2024, the interest rate on delinquent taxes is 6% per year, compounded daily. These charges continue until the balance is paid.

Failure to address unpaid taxes can lead to collection actions, including tax liens, wage garnishments, or bank levies. A tax lien is a legal claim against your property, affecting credit scores and complicating property sales. Wage garnishments allow the state to deduct earnings directly from your paycheck, while bank levies enable the seizure of funds from your accounts.

Addressing Tax Discrepancies

If the Missouri Department of Revenue finds inconsistencies in your tax return, it may request clarification or additional documentation. Discrepancies often arise from mismatched income reports, incorrect deductions, or missing financial details. The state cross-references tax filings with employer records, financial institutions, and federal tax data.

A common trigger is unreported or underreported income. If W-2 or 1099 forms show earnings that differ from what was filed, the state may recalculate your tax liability, potentially resulting in a higher tax bill or a reduced refund.

Errors in filing status or exemptions can also prompt a review. Claiming an incorrect number of dependents or selecting the wrong filing status—such as “Head of Household” without meeting qualifications—can lead to adjustments. The state may request proof, such as birth certificates for dependents or documentation of household expenses. If claims are inaccurate, additional taxes and penalties may apply.

Withholding Adjustments

A letter about withholding adjustments usually means the amount deducted from your paycheck doesn’t match your actual tax liability. Employers withhold state income taxes based on your MO W-4 form, but changes in income, filing status, or tax laws can cause discrepancies. If too little was withheld, you may owe additional taxes; if too much, you could receive a larger refund.

Adjustments may occur if you claim too many allowances or fail to update withholding after major life events. Marriage, divorce, having a child, or taking on a second job can all impact tax liability. If you previously filed as single but later qualify for “Married Filing Jointly,” updating your MO W-4 can help prevent underpayment. Similarly, multiple jobs can result in under-withholding if each employer assumes that job is your only source of income.

Missouri periodically updates tax tables and withholding formulas. If tax rates or deductions change, employers may need to adjust payroll withholdings. Reviewing your pay stubs and withholding statements ensures the correct amount is deducted. If necessary, submitting a revised MO W-4 to your employer can prevent unexpected tax liabilities.

Identity Verification

To combat tax-related identity fraud, the Missouri Department of Revenue may request identity confirmation before processing a return. If you receive a letter asking for verification, the agency is ensuring that a tax return filed in your name was legitimately submitted by you.

A return may be flagged due to unusual filing patterns, such as a sudden change in income sources, unfamiliar employer information, or newly claimed credits. The department may ask for identification documents like a driver’s license, Social Security card, or an IRS-issued Identity Protection PIN (IP PIN). You may also need to complete an identity quiz or verify details through the state’s online portal before your return is processed.

Possible Refund Modifications

A letter about a refund modification means the state has reviewed your return and adjusted the refund amount. This can happen due to errors in reported income, miscalculations of credits, or outstanding debts that must be offset before issuing a refund.

One reason for a refund adjustment is a tax offset. Missouri law allows the Department of Revenue to use your refund to cover unpaid state obligations, such as past-due income taxes, child support arrears, or delinquent student loans owed to state agencies. If a refund is reduced due to an offset, you will receive a notice explaining the amount withheld and the agency that received the funds. If you believe the debt was paid or does not belong to you, you may dispute the offset.

Refund modifications can also result from errors in tax credits or deductions. If you incorrectly claim a refundable credit—such as the Missouri Property Tax Credit for eligible seniors and disabled individuals—the state may adjust the refund. Similarly, if a miscalculation leads to an overstatement of withholding payments, the Department of Revenue may correct the error before issuing the refund. If you disagree with the adjustment, you can request a review and provide supporting documentation.