Michigan Creates Tax Dispute Resolution Program

Michigan has enacted legislation that creates a tax dispute resolution program. Once a request for an informal conference has been timely filed, a taxpayer and the Michigan Department of Taxation can attempt to settle disputes by submitting a written settlement offer to the other party. The taxpayer must submit the written settlement offer no later than 21 days after the informal conference. The settlement offer needs to include the issue(s) in dispute, the amount of the settlement offer, the factual and legal bases supporting the settlement offer, and any supporting documents. The Michigan treasurer will then determine whether to accept, reject, or counter the offer. The Department is required to notify the taxpayer of its decision in writing. If the Department does not accept the offer, it has to include the factual and legal bases for its rejection or counter-offer. The taxpayer may accept, reject, or counter the department’s counter-offer. If the department accepts the taxpayer’s settlement offer or counter-offer or the taxpayer accepts the department’s settlement offer or counter-offer, the department and the taxpayer shall execute a written agreement outlining all of the terms of the settlement. If no agreement is reached, the regular informal conference process would proceed unless the taxpayer files a written notice to withdraw the request for an informal conference. Taxpayers should note that settlement offers, counter-offers, settlement agreements, and reports of the informal conference referee related to settlements are exempt from disclosure under the Freedom of Information Act and cannot be obtained through discovery. (Act 215 (H.B. 4976), Laws 2017, effective December 28, 2017)

Posted on January 29, 2018