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Warner Norcross + Judd LLP is a corporate law firm with over 230 attorneys serving clients in nine offices throughout Michigan. Among the largest law firms in Michigan, Warner works in virtually all areas of business law.

Michigan Law Firm - Warner Norcross + Judd LLP

Owing money to the Michigan Department of Treasury is no laughing matter – the state agency is notoriously aggressive in collecting tax debts. Michigan taxpayers have historically been limited to paying the full amount owed, contesting liability or entering into an installment payment plan to resolve outstanding tax liabilities with the state. Earlier this year, another important tool was added to the belt of Michigan taxpayers: the Offer in Compromise.

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An Offer in Compromise is, quite simply, a way to settle a tax debt for less than the full amount owed. It is a well-known tool that has been available from the Internal Revenue Service for years. In June 2014, Gov. Rick Snyder finally brought Michigan into the mainstream by signing legislation (<a href="http://www.legislature.mi.gov/(S(d2m1xlknf4fy025zahncqiqw))/documents/mcl/pdf/mcl-205-23a.pdf" target="_blank" rel="noreferrer noopener">Mich. Comp. Law § 205.23a</a>) allowing the state treasurer to compromise all or any part of a tax liability, including any related penalties and interest, starting January 1, 2015. The Michigan Department of Treasury has already published <a href="http://www.michigan.gov/taxes/0,4676,7-238-68920---,00.html" target="_blank" rel="noreferrer noopener">guidelines</a> on the Offer in Compromise Program.

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To qualify for an Offer in Compromise, you must meet each of the three following criteria:

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If you meet all of the above criteria, you may submit an Offer in Compromise to the Michigan Department of Treasury for one of the following three reasons:

Michigan’s Offer in Compromise program allows taxpayers to either make one lump-sum payment within 30 days of the date the offer is accepted by the state treasurer, or monthly installment payments over five or fewer months. Remember that when you submit an Offer in Compromise, you must include a non-refundable initial payment equal to the greater of $100 or 20% of the total amount of your offer. If your Offer in Compromise is accepted, this amount is applied toward your total offer. If rejected, the balance of the unpaid taxes is applied to your outstanding tax liability.

While new, the state’s program provides a familiar tool for taxpayers and practitioners to resolve outstanding tax liabilities. The process is complicated and it is still unknown how accommodating the Department of Treasury will be in granting this relief. Working with an experienced tax attorney is the best way to increase your chances of success in resolving any tax liability.

If you have any questions regarding the Michigan Department of Treasury’s Offer in Compromise program, or any other tax matter, please contact one of our many experienced tax attorneys. For assistance with identifying the best Warner tax attorney for you, please call 616.752.2000.

Michigan’s Offer in Compromise Program Provides Taxpayer Relief

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