Michigan Introduces New Alternative Resolution Tax Dispute Process

By George Grzywacz, CPA, JD – Shareholder, Doeren Mayhew

On Dec. 20, 2017 a new dispute resolution process was signed into law allowing the Michigan Department of Treasury to settle tax disputes through the use of an informal conference. Prior to the law’s enactment, taxpayers were only allowed to resolve disputes with the Treasury through either the Michigan Tax Tribunal or the Michigan Court of Claims.

Timing will be everything in this new process. Only taxpayers that make both a timely informal conference and settlement dispute request will be eligible to engage in this process. An informal conference request must be made within 60 days after the taxpayer receives the notice of intent to assess, while a request for settlement must be made within 21 days after the conference date. If a taxpayer chooses not to participate in this process or fails to meet the request filing dates, they can still pursue resolution of their dispute through the Tax Tribunal or Court of Claims.

The Department of Treasury may consider settling a tax dispute with a taxpayer if, after taking into consideration the factual and legal issues involved and the risks of litigating the dispute, it is in the state’s best interests to accept a lesser amount of tax than previously determined was owed by the taxpayer. Doubt as to a taxpayer’s ability to pay or the Treasury’s ability to collect the tax does not constitute a basis for settlement.

More information, including application forms and guidelines, related to the process is expected to be released by the Department of Treasury in the weeks to come on their website. As the process gets implemented, look to Doeren Mayhew to keep you up-to-date on its pros and cons, and other considerations. Should you have any questions about pursuing this new alternative tax dispute resolution process, please contact our CPAs and advisors.