About Discovery and Tax Enforcement
The Discovery and Tax Enforcement Division was created in January 1987, as part of an enhanced enforcement initiative that followed the Tax Amnesty Program of 1986. The division is located within the Tax Compliance Bureau and is comprised of various units with a variety of responsibilities.
Discovery promotes taxpayer education and tax registration and licensing, while helping to maintain voluntary tax compliance.
The Tax Enforcement Unit concentrates on civil and criminal investigation and prosecution of tax fraud cases, working in conjunction with the Michigan State Police, other law enforcement agencies, and the Attorney General.
The Discovery Unit is responsible for developing and conducting projects designed to identify and contact non-filers and under-reporters of the various taxes administered by the Michigan Department of Treasury. Taxpayers are notified of their tax discrepancies using letters of inquiry issued in accordance with MCL 205.21 of the Revenue Act .
The Discovery Unit utilizes information from a variety of sources to identify non-compliant taxpayers.
If you received a letter of inquiry regarding a particular tax, your response needs to be sent to the address listed in the letter. If the letter of inquiry is in regard to your Michigan Individual Income Tax (MI-1040), Homestead Property Tax Credit (MI-1040CR) or Michigan Home Heating Credit (MI-1040CR7) do not file an amended return.
The Discovery Unit sends letters of inquiry to non-filers of Michigan taxes offering Michigan's Voluntary Disclosure. Voluntary Disclosure was designed to allow non-resident taxpayers to voluntarily come forward and report unpaid taxes. In exchange for payment of tax and interest and future tax compliance, a limited lookback period and waiver of penalty may be offered.
A person that does not qualify under voluntary disclosure legislation may be able to utilize the Taxpayer Initiated Disclosure program and may be eligible for a penalty waiver as outlined in RAB 2005-03, Penalty Provisions.
For a complete list of frequently asked questions pertaining to all tax types go to www.michigan.gov/taxes and click on "FAQ" in the gray shaded area at the top of the page. Additional information regarding the various taxes can also be obtained at the www.michigan.gov/taxes web site by typing "tax text" in the "Advanced Search" box located in the upper right hand corner of the page and then clicking go.
Always have your letter in front of you so you can refer to it if necessary. Always read the entire letter before calling.
Call the phone number on the letter you received. The receptionist will ask you for a unique identifier in the upper right hand corner of the letter so that you will be transferred to the proper person.
A phone call does not constitute a response to our letters. (See Hints When Writing)
If we are unavailable to take your call, please leave a detailed voice mail message. Include the following information:
- Your name and phone number
- Your federal identification number
- Unique identifier in the upper right hand corner of the letter you received
- The tax for which you are being contacted
- The years of review
- Voluntary Disclosure file number, if available (e.g. 2012-01-01-01-ABC)
- Any other pertinent information
- Always mail back the correspondence requested in the letter of inquiry along with a copy of the letter and the transmittal or form requested so that your information is routed to the appropriate person in a timely manner.
- Write your unique identifier or federal identification number on all your correspondence.
- Include your name and telephone number so we can contact you if we have any questions.
- A phone call does not constitute a response to our letter. A response requires mailing the documentation asked for in our letter, along with any necessary explanations.
- If you are mailing tax returns, always keep a copy for your records.
- Never mail original documents. We do not mail original documentation back.
- Be sure to submit documentation for all years of an inquiry, not just the years for which you have a liability. We need the documentation for verification purposes.
- All correspondence is reviewed in the order received. You may be able to check the status of your Income Tax response by visiting www.michigan.gov/taxes and selecting "Where's My Income Tax Refund?" You will then have several options available to you online.
- Failure to submit copies of all requested information by the due date on the letter will result in an adjustment. Adjustments may result in a reduction/denial of your refund or a bill for tax, interest and penalty.
- If a return envelope was mailed to you, use it when sending your response to us. If no return envelope was mailed, make sure you mail to the address identified in the letter you received to ensure your correspondence gets routed properly. Do not use our address for anything else you need to mail to another Treasury division, as each division has its own address and post office box.
- Make your check payable to the "State of Michigan".
- Always write your unique identifier or federal identification number on your check.
- Write the type of tax and the tax year(s) you are paying on the check: Michigan Business tax (MBT); Income tax (IIT); Sales, Use or Withholding tax. If your check happens to get separated from the returns or documentation you submitted, we know where to apply the money.
- If you are submitting multiple returns for one tax, you can write one check for the total.
- If you are paying several different types of taxes, it is best to write a separate check for each tax and mail them to the address indicated in the letter.
- Never send a check or money order without some form of documentation. This could cause delay in processing your payment.
- Never send cash.
1353, Michigan Department of Treasury Nexus Questionnaire
3-Year MBT Agreement
4-Year MBT Agreement
4133, Voluntary Disclosure Request
4696, Summary of Revenue Administrative Bulletins (RABs) 2007-6 and 2008-4
Form 4503, Summary of Revenue Administrative Bulletins (RAB) 1999-1
RAB 2007-6 Michigan Business Tax - "Actively Solicits" Defined
RAB 2008-4, Michigan Business Tax Nexus Standards
Revenue Administrative Bulletin 1998-1
Revenue Administrative Bulletin 1999-1
UC 518, Michigan Business Tax Registration Application
Use Tax Agreement