TAX DEBT RELIEF OPTIONS – Michigan Department of Treasury

M&M Financial has been helping taxpayers fix their back-tax issues since 2005.  Our first negotiation with the Michigan Department of Treasury was way back in 2006.  We deal with the IRS and State taxing authorities, so you do not have to! 

The state of Michigan has been known to use a third-party collection company to collect back-taxes.  Whether you’re dealing directly with the MI-DOT or MARCS (Michigan Accounts Receivable Collection System), it’s a good idea to have someone in your corner that knows your rights! 

Below is some information that will help you start resolving your state of Michigan tax liabilities.  If you have questions and would like to talk to a licensed Tax Resolution Specialist please do not hesitate to call us at 866-487-5624.

MI–DOT PAYMENT PLANS TO RESOLVE BACK TAXES

Michigan will typically grant a 24-month Installment Agreement to an individual that owes back taxes without reviewing financial information.   If you need longer than 2 years to pay your tax debt or if your business owes back taxes the state of Michigan will likely require financial information and documents to be submitted supporting your inability to pay within the standard 2-year period.  
Michigan is much easier on individuals than it is on businesses.  It can get tricky when negotiating a business tax debt.  

You may get up to 48 months to pay back your individual tax debt.  Convincing the State or Michigan to accept a 48 month pay plan to resolve your business tax debt is much more difficult.

Michigan also uses a third-party collection company called MARCS (Michigan Accounts Receivable System) to assist in collecting back taxes.  If you are contacted by MARCS, they might approve a payment plan but that won’t always stop the collection process by the state.  

We recommend engaging professional representation of your business before the MI-DOT to ensure your tax liabilities are resolved in your best interest and all your bases are covered.    

REDUCE YOUR MI–DOT TAX DEBT

The state of Michigan isn’t the most forgiving when it comes to tax delinquencies. The state and many of its cities have been struggling to pay their own debts for years now.  They don’t let too many taxpayers slip past without a pretty good squeeze.  However, the Offer in Compromise and Penalty Abatement programs are options to reduce your total tax liability, that is, if you qualify.  

Offer in Compromise

Michigan Department of Treasury does have an Offer in Compromise program to settle your tax debt for a lesser amount.  This is a relatively new program beginning in 2015 that is geared more for delinquent individual taxpayers rather than operating businesses.  We typically do not recommend trying to resolve your Michigan Business Tax Debt via the Offer in Compromise.  Here you will find additional information, forms and instructions for the Michigan Offer in Compromise.  

Penalty Relief

It is very difficult to get the state of Michigan to waive penalties.  In order to be considered for penalty relief you will need to prove that an unavoidable hardship caused your failure to pay on time.  “Reasonable Cause”, as the state puts it, may be 

• serious illness or death, 
• a fire or natural disaster or 
• criminal acts against a taxpayer.  

Your request for penalty relief must be submitted in writing and the timing of your hardship should coincide with your tax accrual.  Be advised that penalty relief is typically not granted on business tax debts.

TAX RESOLUTION CASE EXAMPLES

The Michigan Department of Treasury has some flexibility when it comes to back tax liabilities.  Each case varies based on factors such as your compliance history, type of tax owed and total amount past due.  Here are some case examples in your state negotiated by M&M.



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