Michigan Passes Tax Amnesty Legislation
Legal Alerts
10.12.10
On October 5, 2010, Governor Granholm signed Michigan Public Act 198 into law authorizing a limited tax amnesty program. In general, tax amnesty will be available to qualifying taxpayers for taxes administered by the Michigan Department of Treasury, and penalties relating to unpaid taxes and interest will be waived if the taxpayer makes a payment of such taxes and interest.
Amnesty Period
Under the program, taxpayers will only be permitted to file a tax amnesty application during the period beginning on May 15, 2011 and ending on June 30, 2011. The amnesty program applies only to taxes due prior to January 1, 2010.
Amnesty Requests
To qualify, a taxpayer must file a written request for amnesty on a Treasury Department prescribed form, submit any unfiled returns or amended returns, and make a full payment of tax and any interest due not later than the end of the amnesty period. Further, a taxpayer cannot be eligible for relief under the Michigan voluntary disclosure program, and will be ineligible for relief if the tax is attributable to income derived from a criminal act, if the taxpayer is under criminal investigation or involved in a civil action or criminal prosecution for that tax, or if the taxpayer has been convicted of a felony under the Michigan Revenue Act or the Internal Revenue Code of 1986.
Penalty Relief
If a taxpayer qualifies for amnesty, the Treasurer must waive all criminal and civil penalties for all taxes administered by the Treasury Department, including taxes for failing or refusing to file a return, failing to pay a tax, or making an excessive claim for a refund of a tax for any qualified amnesty applicant. Any tax administered under the Revenue Act (1941 PA 122) is subject to the amnesty, including among other taxes the personal income tax, the former Michigan Single Business Tax ("SBT"), the Michigan Business Tax ("MBT"), and the sales and use tax.
A prior, similar tax amnesty program was used in Michigan in 2002. This program reportedly raised $81.9 million, consisting mainly of SBT, sales and use, and personal income tax and related interest amounts. Business tax filers accounted for 77% of amnesty payments.
Taxpayers with questions about these or other Michigan tax matters may contact Wayne D. Roberts at 616-776-7514, Steven Grob at 313-568-6582, or Sherrill D. Wolford at 313-568-6849.
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