Michigan Amnesty Program Details NOW Available! (Begins May 15th)

As I reported in an earlier post, Michigan has enacted an Amnesty program that begins May 15th.  In addition, Michigan has just published some information on its website regarding the program.

BACKGROUND

The Michigan Tax Amnesty program provides a 45-day window for taxpayers to settle tax liabilities with the State, for return periods ending on or before December 31, 2009 and avoid penalty payments. Qualifying taxpayers also avoid civil and criminal penalties and prosecution by the Michigan Department of Treasury.

Tax Amnesty is available for individual or business taxpayers who have tax liabilities for eligible taxes for return periods ending on or before December 31, 2009. This includes:

  • Underreported tax liabilities
  • Non-reported tax liabilities
  • Overstated deductions, credits, or exemptions
  • Failure to file Michigan tax returns
  • Delinquent payment of past due taxes
  • Taxpayers who have received a final tax due notice

ELIGIBILITY

Individuals and business taxpayers are not eligible for Tax Amnesty if they are:

  • The subject of a current tax-related Court of Claims case or criminal investigation
  • Eligible to enter into a Voluntary Disclosure agreement with the State
VOLUNTARY DISCLOSURE AGREEMENT (VDA) OR AMNESTY?

Should a taxpayer file a Voluntary Disclosure Agreement or participate in the Amnesty program? 

If a taxpayer is eligible to file a Voluntary Disclosure Agreement (VDA), then it cannot participate in the Amnesty program. This is actually good, because there is no limit to the look-back period under the Amnesty program. A VDA’s lookback period is 4 years. The Amnesty program covers all tax years prior to January 1, 2010, therefore, a  taxpayer would have to file all unfiled returns for years prior to January 1, 2010, and pay tax and interest.

Go to Michigan's website for more information on Michigan's Voluntary Disclosure program.

This blog

Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States.  He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect."  For more info, visit his website: www.leveragestateandlocaltax.com

You can reach Brian at strahle@leveragesalt.com.

Connect with Brian on LinkedIn. Follow Brian on Twitter. Join the Leverage | SALT LinkedIn Group, connect and contribute with your colleagues!  

Because state and local taxes are deceptively simple and endlessly complicated.

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