Collection Process For Delinquent Taxes
Taxpayers are required to meet certain obligations under Michigan law. You are responsible for filing your tax returns on time with correct payments
and ensuring that your returns are correct no matter who prepares them. Remember, you
are responsible for the information in your return.
The following information will provide an overview of the Collection Process for Delinquent Taxes.
| How To Resolve Tax Debts
Prior To Collection |
It is important to resolve any outstanding tax you owe as soon as possible. Penalty and interest will be added to your debt and will continue to grow until the amount is paid in full. Penalty charges can
range from 25% to
500% of the tax due, depending on the type of the tax!
If you do not pay your taxes, you may receive a LETTER OF INQUIRY, NOTICE OF INTENT TO
ASSESS, and/or a BILL FOR TAXES DUE (Final Assessment). This is your opportunity to resolve the debt prior to having the debt referred to
collections, by either paying the amount due, appealing the assessment, or
entering into an installment agreement. Do not wait for the Collection Division to contact you!
You must immediately take action to resolve your debt to avoid collection
enforcement action.
Under the authority of
Public Act 122 of 1941
, as amended, the Collection Division is responsible for the collection of all delinquent state tax accounts for the State of Michigan.
The Department may proceed to collect your delinquent tax debt by using several different enforcement methods. The Collection Division can use collection enforcement action for a minimum of 6 years to collect the debt. The 6 year period, known as the statute of limitations, may be extended by certain actions such as a court judgment.
By law, the Department may use a variety of actions to collect your past-due tax, penalty and interest and may take these actions at any time during the course of collection.
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Liens
The Collection Division will file liens on Real and Personal property to
protect the State's interest as a creditor. Liens will be filed even when a
taxpayer has made payment arrangements and is current with all payments.
Caution! Once a lien is filed, the
taxpayer's credit rating could be harmed and, in most cases, property cannot
be sold or transferred until the past-due tax is paid. A lien filed at a
county Register of Deeds becomes a public record. Credit reporting agencies
may obtain and publish the lien information. A lien filed against an
individual or business that is picked up by a credit reporting agency will
remain part of that credit history for the next seven to ten years. |
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Tax Warrants (Seizure of
Business and Personal Property)
The Department has the authority to issue a Tax Warrant to close your business and/or to seize and sell your personal property (such as
business vehicles,
business assets, equipment and inventory). The money from the sale of the
business assets will be applied to your tax debt.
Notification is provided to you of the amount owed at least 10 days before
the property is seized. Most seized property cannot be sold by the
Department for at least 10 days (perishable items may be sold within 24 hours).
Seizure related expenses (such as state personnel costs, locksmith service, towing
company assistance, storage
facility, advertising and mailing costs) will be charged to you. |
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Wage Levies
The Department may levy against your wages, salaries, bonuses, commissions,
and other compensation from your employer. A
wage levy requires your employer to deduct a specified amount from your wages to pay the past-due
debt. Notification is provided to you of the amount owed at least 10 days before a wage
levy is sent to your employer. The employer must continue to deduct the specified amount from your net wages until the amount
of the levy is paid.
An additional fee (warrant costs) in the amount of $55 is added to the
delinquent amount due for each
levy served. |
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Financial Institution Levies
The Department may serve a levy against your financial institution (banks,
credit unions, brokerage firms, etc.) which requires your financial
institution to
send any funds being held to the Department up to the total past due tax,
penalty and interest amount.
You will be notified of the amount you owe at least 10 days before a levy
is sent to your financial institution. An additional fee (warrant costs) in the amount of $55
is added to the delinquent amount due for each levy served. |
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Other types of Levies
The Department may levy against assets held by a third party. Examples of this type of
levy would be a license held in escrow, rental income or insurance proceeds. You will be notified of
the amount you owe at least 10 days before a levy is sent. An additional
fee (warrant costs) in the amount of $55 is added to the delinquent amount
due for each levy served. |
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Offset refunds or other monies owed to you
Your (or your spouse's) income tax refund or credits may be offset and applied to your tax debt. In addition, we may offset any other money that you receive from the State of Michigan (such as lottery winnings and payments to vendors for services performed) and apply the amount to your tax debt. |
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Hold you personally responsible for business taxes
The Revenue Act provides the Department with the authority to hold
officers, members, managers, and/or partners of a corporation, limited
liability company, limited liability partnership, limited partnership, or a
partnership personally liable for the unpaid taxes and any related penalties
and interest. This process is referred to as
Corporate Officer
Liability. |
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Liquor License revocation or renewal
If the business holds a liquor license and is past due in filing or paying business taxes,
the Department of Treasury can request that the Michigan Liquor Control Commission
revoke or not renew your liquor license. Taxpayers are prohibited by law
from selling any products containing alcohol without a valid liquor
license. Wholesalers, manufacturers, or brewers cannot legally sell or deliver products to liquor retailers who do not have a valid liquor license. |
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Refer your account to a collection agency
The Michigan Department of Treasury contracts with a private collection
agency, the Michigan Accounts Receivable Collection System (MARCS), to help
us collect the delinquent tax, penalty and interest owed to the State of
Michigan. |
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Other Collection methods, as necessary
Your account may be referred to the Michigan Department of Attorney General for
additional legal actions. |
How to Pay
- Make your check payable to "STATE of MICHIGAN - CD"
-
Write your assessment number and account number on the check. Your account number is your Social Security or tax identification number.
- Include the payment coupon from the bottom of your billing notice.
- Please allow at least 10 - 14 days for mailing and processing of your payment.
- Please mail your payment to the following address:
Michigan Department of Treasury-CD
P.O. Box 30199
Lansing, MI 48909
Credit card or Debit card payments are not accepted at this time.
Our e-Services site will allow you to make an Automated Clearing House (ACH) payment from your checking or savings account. Please have your financial institution account number and that institutions 9-digit routing number available when you access
Collections e-service
.
To pay by electronic withdrawal from your checking or savings account (EFT), please have your bank account number and the 9 digit routing number for your financial institution available when you call the Collection Division. If you have any questions about these numbers, please contact your bank or financial institution.
| What If I Can't Pay All Of
The Debt At This Time? |
After you receive your BILL FOR TAXES DUE (FINAL
ASSESSMENT) the Department of Treasury may consider an Installment Agreement if your situation meets certain criteria.
For Installment Agreements lasting for 24 months or less, you must
complete, sign and return the
INSTALLMENT AGREEMENT
(Form 990). The agreement requires a proposed payment amount that will be reviewed for approval by Treasury. All highlighted areas of the form are required and must be filled in completely before your request for an installment agreement will be considered for approval. Failure to complete the required areas will result in a delay of processing and continued collection efforts
will continue.
If you are interested in an Installment Agreement
for a period longer than 24 months, please call the Collection Division for more information.
The Collection Division will file liens on Real
and Personal property to protect the State's interest as a creditor. Liens will
be filed even when a taxpayer has made payment arrangements and is current with
all payments.
Caution! Once a lien is filed, the
taxpayer's credit rating could be harmed and, in most cases, property cannot be
sold or transferred until the past-due tax is paid. A lien filed at a county
Register of Deeds becomes a public record. Credit reporting agencies may obtain
and publish the lien information. A lien filed against an individual or business
that is picked up by a credit reporting agency will remain part of that credit
history for the next seven to ten years.
If you have been contacted by the Michigan
Accounts Receivable Collection System (MARCS), please contact them directly for
more information about Installment Agreements.
Important: The Department of Treasury is prohibited by law from compromising or reducing the amount of tax you owe to the State of Michigan.
| What To Do If You Disagree |
If you believe you have received a bill for taxes due that you do not owe, send the following information to support your claim:
- A letter explaining why the tax is not due with documents to support the reasons you outline in your letter. Be sure to include your account number (Social
Security or tax identification number) on the letter.
- A copy of the billing notice you received from
the Michigan Department of Treasury.
Mail the above information to the address that appears on the bill.
Information about how to appeal the bill can be found on the back of the billing notice, or in the Taxpayer Rights Handbook.
| Other Helpful Information |
Power of Attorney
If you wish to authorize another person or corporation, (tax
preparer, accountant, attorney, family member, etc.,) as your representative in tax or debt matters before the State of Michigan, you must complete and file a
Power of Attorney Authorization (Form
151) with the Collection Division.
Estimate Penalty and
Interest Owed for a Late Payment
Frequently Asked Questions about Delinquent Accounts
Information about
Driver Responsibility Fees
Telephone Inquires:
Due to heavy call volumes, there may be a delay in answering your call. To assist our customer service representatives in helping you, please have your account number and tax documents with you when you call.
Your account number is your Social Security or tax identification number.
- If you don't understand why you received your bill, please contact the appropriate Tax Division at the number below:
- Income Tax (517) 636-4486
- Sales, Use and Withholding Taxes (517) 636-4730
- Single Business Tax (517) 636-4700
- Michigan Business Tax (517) 636-4657
- Motor Fuel Taxes (517) 636-4600
- To pay your debt or other questions about your delinquent account, call Treasury Collection Division
at (517) 636-5265.
- If you are making a payment by electronic
withdrawal (EFT), please have your bank account number and the 9 digit bank routing
number of your financial institution available. If you have any questions
about these numbers, please contact your bank or financial institution.
