Willful Neglect

What the law says: This issue is covered by Section 15(i) of the Michigan Employment Security Act. The law says that if an employer fails to file a tax return, and the return is late by more than 30 days, and the failure to file is willful, the UIA may estimate the taxes due. Based on that estimate, the UIA may assess the principal amount due, as well as interest and penalties. This is called a “willful neglect” determination.

Examples: The employer has not filed a tax report (Form UC 1020) for the calendar quarter ending March 31. The tax report was due by the 25th day of the month following the end of the calendar quarter; therefore, the report was due April 25, 1990. As of May 26, the report is more than 30 days overdue. At that point, the UIA may estimate taxes due and impose whatever interest and penalties would apply to that estimated amount of taxes due.

Proof at the Hearing: The UIA has the burden of proving the that the employer failed to file the tax return and that the failure to file was willful. The employer can bring business records to disprove the UIA .

For Further Help: The Unemployment Insurance Agency (UIA) Advocacy Program can provide assistance to employers in preparing for Administrative Law Judge and Board of Review hearings on this issue. Call 1-800-638-3994.

The information on this sheet is intended to provide a general understanding of the subject matter. It does not have the force of law or regulation.