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Missouri revenue director to resign after tax chaos

March 15, 2019
This undated photo provided by the Missouri Revenue Department is Director Joel Walters who is resigning following criticism over his agency's handling of tax changes. Gov. Mike Parson on Friday, March 15, 2019 announced current department Chief Operating Officer Ken Zellers will take over as acting director. Walters' resignation comes after lawmakers repeatedly slammed him for not communicating better about tax changes that will mean some Missourians get smaller refunds or owe more when they file their taxes. (Missouri Revenue Department via AP)

COLUMBIA, Mo. (AP) — Missouri Revenue Department Director Joel Walters will resign next week following blistering criticism because he said the state’s tax withholding tables had been wrong for years, issued a revision that he said fixed the problem and then reversed himself and said there had been no error in the first place.

Gov. Mike Parson on Friday announced the agency’s chief operating officer, Ken Zellers, will take over as acting director when Walters steps down March 22.

Walters did not specify why he’s leaving in his resignation letter to Parson. But he said as he approaches serving two years as director, he has “concluded that it is time for me to leave the service of the state of Missouri.”

His departure comes after months of bipartisan pushback from lawmakers concerned over how he dealt with tax law changes that will mean some Missouri taxpayers will get a smaller refund or a bigger-than-usual tax bill this year.

Walters previously told a House committee that a longstanding error in Missouri’s withholding tables, which are used by employers to calculate how much to take from workers’ paychecks throughout the year for income taxes, was to blame.

But Walters later told lawmakers that the withholding calculation only accounted for a small portion of the issue. He said President Donald Trump’s federal tax law overhaul caused most of the problem.

That’s because under previous tax law, taxpayers often over-withheld throughout the year and received a bigger refund.

Revenue Department Legislative Director Mark Siettmann on Wednesday told the House Committee on Government Oversight that the revamped federal law, which Missouri tax law is linked to, makes that much more difficult to do.

As a result, some Missouri residents who typically receive a refund might receive less than usual this year, and others might owe more.

Republican and Democratic lawmakers for months slammed Walters for not warning taxpayers when the agency first became aware of the problem last year. Some legislators raised concerns that low-income Missourians might not have the savings to pay for unexpected tax bills.

“The Parson administration was aware in the fall that the Trump tax law would result in surprise tax bills for countless Missourians,” House Democratic Minority Leader Crystal Quade said in a statement. “Instead of taking steps to warn Missourians of this problem, the administration covered it up to prevent it from being an issue ahead of the November elections.”

Several pending bills would give taxpayers who owe less than $200 more time to pay and waive penalties or interest for late payments.

Parson has defended Walters and previously said state lawmakers were “grandstanding” by holding numerous hearings on the issue.

He continued to stick by Walters Friday.

“His leadership and transformative vision helped to turn around the Department of Revenue, leading to increased customer service, identifying efficiencies that led to significant budget savings, and implementing a number of conservative reforms that helped improve and streamline services for Missouri taxpayers,” Parson said in a statement.

Missouri tax revenues were down by more than $333 million compared to last fiscal year as of Thursday. Individual income tax revenues were down by $463 million.

State budgeters are banking on most of the difference being made up when Missourians file their taxes.