State of Michigan Audit Representation

You open the mail and a letter arrives from the State stating they question your income versus taxes paid. Maybe they are not allowing a Homestead Credit, or numbers on the MI-1040 do not match the documents files with the State.

The majority of State audits are correspondence audits. The documents the State requires are confusing.

If you hire a Padgett Enrolled Agent, we will:

  • Clearly explain the errors made or the compliance requirements.
  • Complete the documents required and work with you to accumulate the required documents for the State.
  • Represent you in all communication or in-person audits.

State of Michigan Seizures

If you are reading this section on Seizures, you have received many liens, levies from the State and now, due to non-payment, and no payment plan in place, the State is preparing to walk in and take your assets, and padlock the business door. They are preparing to force you to sell your home so they will be paid. They have levied bank accounts, looked at your receivables, customer base and exhausted all options. The State says “Enough!” They decide to seize your assets. They have to STOP the tax debt from growing!

Most Seizures occur due to non-payment of Sales Tax by a business. The State takes the position that if you do not submit your sales tax, or abide by a Payment Plan, they will padlock your business door and STOP the growing tax debt.

Can the State legally seize your business’ property; your personal and business vehicles, wipe out the cash balance in your business checking account, your personal account? Yes.

Due to State Congressional laws, we have to pay taxes and the State is the administrative arm of the government to collect those taxes. They will recover taxes owed, no matter how they have to do it.

If you do not pay this debt, the State will levy your property and accounts, seize assets (from your small business and possibly your personal assets) until their debt, penalties and interest are paid.

If you have had NO REPRESENTATION to this point and you are facing seizure, call Christy to discuss what your options may be.

It may be too late but she can advise you on your options. It may be possible to stop the seizure and work on a payment plan with the State.

State of Michigan Offer-in-Compromise

The State of Michigan recently passed new legislation under Public Act 240 of 2014 which will now allow Offers-in-Compromise, effective January 1st, 2015. Similar to the federal Offer-in-Compromise program, it is geared towards taxpayers with severe hardship and extenuating circumstances. An offer can be made to pay the State less than what is currently owed, if:

  • A federal Offer-in-Compromise has been given for the same year.
  • Doubt exists as to the amount of taxes owed by the taxpayer.
  • Taxpayer provides documentation to prove they cannot pay the amount owed to the State.

Application material will become available sometime in the fall of 2014. But applications cannot be sent in until January 1st of 2015.

To learn more about Offers-in-Compromises under the federal program, refer to IRS Offer-in-Compromise.

woman typing on calculator

Non-filed State of Michigan Tax Returns

You are the custodian, trustee, of the States sales tax money. Or you need to pay Use Tax. And the State wants its money. A customer gave you $200 for a product plus $12 sales tax. You should be paying the $12 to the State but instead, you paid some invoices, drew it out of the bank account to live off of it. Then the deadline came to pay the State the $12 and you don’t have it at all. It grows to $10,000, then $20,000 and on and on.

— OR —

You filed your 1040 with the IRS but you were told you did not have to file with the State… Did you know that the IRS and the State talk to each other? If the State sees a 1040 filed, they will notify you for the MI-1040.

With a Power of Attorney that you sign, we can contact the State and obtain records and an accounting of what they are seeing. From here we work through the tax return preparation.

Keep in mind…if the return is late, you do not want errors in it and you do not want it rejected. Time is of the essence and a poorly prepared return can be more costly with growing interest and penalties.

Contact your Padgett accountant immediately.

  • Avoid any tax issues and file your returns by required deadlines – every return has a due date.
  • Resolve your tax issues with a reasonably priced licensed professional as Padgett.
  • Learn what you can do with common sense alternatives.

State of Michigan Tax Payment Plans

We hear many reasons why you did not pay your State taxes. We want to offer you options for payment.

Work with a Padgett Enrolled Agent to:

  • Communicate with the State on your behalf.
  • Arrange an Installment Agreement with the State that allows you to maintain a reasonable standard of living.
  • Discuss other payment options such as credit card or loans.

Do you really want to contact MARCS (Michigan Accounts Receivable Collection System)? Do you know they will demand that you “full pay”? But you can pay under an Installment Agreement!

We help you look ahead

Many small business owners think of tax season as a time to look in the rearview mirror at the previous year. At Padgett, we help you also look through the windshield. Not only do we look at last years finances to calculate what you owe, but we help you get a firm understanding of what your next year is going to look like—before the tax season even begins. We want to be more than just a tax service—we want to be the proactive business partner that you deserve. We are motivated by helping your business