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Last Updated: 7/28/2017

Uncollectible Debt

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Collection

651-556-3003
800-657-3909
8:00 a.m. - 4:30 p.m. Mon.- Fri.

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Tax Debts

When a debt becomes uncollectible, we may determine to remove it from our accounts receivable records and take no further actions to collect the debt. (See Minnesota Statute 16D.09.)

A debt is uncollectible if the:

  • statute of limitations has expired
  • debt was discharged in bankruptcy
  • only liable debtor is deceased or indigent

We may also determine a debt is uncollectible in the following situations:

  • We have exhausted all reasonable collection efforts.
  • It will cost more to collect the debt than the amount owed.
  • The debtor’s available income and assets are insufficient to pay the debt.
  • It is not in the state’s best interest to pursue collection of the debt.

We may continue to apply tax refunds for up to 10 years after a debt originated. At that time, we remove the debt from our records.

Other Debts

If the uncollectible debt is one we are collecting for another agency, we return the debt to that agency. They will decide whether to declare the debt uncollectible or try to collect it themselves.