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Audit: Missouri Revenue Agency Didn't Refund Businesses $20M

State of Missouri audit released in September 2015 found that the State’s Department of Revenue didn't refund about $20 million in cash bonds to closed businesses and the agency was not actively pursuing the return of the money to its rightful owners.

The bonds in question are given by businesses to the agency when applying for a license needed to collect sales taxes. After two years of properly paying taxes or if they close and do not owe taxes, businesses can reclaim these bonds.

The audit stated that the Department of Revenue personnel believed the bonds could be forfeited to the state after a five-year statute of limitations, although the department has never processed any forfeiture. The auditor’s office does not agree that there's a statute of limitations, arguing that the money should be put in unclaimed property. About $16.3 million of the $20 million cited was held by the department for businesses closed for more than three years, when unclaimed property should be turned over to the state treasurer.

A system to automatically refund closed or compliant businesses is scheduled to come into force in July 2016 as part of a wider effort to update the main tax processing system of the state.

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