1. Who do I need to notify if I have filed bankruptcy?

For tax year 2015 and forward, notify the Michigan Department of Treasury.

Michigan Department of Treasury
City Tax Administration
P.O. Box 30741
Lansing, MI 48909

For tax years 2014 and prior, contact the City of Detroit at 313-224-3315 or visit the City of Detroit web page at http://www.detroitmi.gov/IncomeTax.

2. Can I set up an installment agreement on a bankruptcy account?

No. Treasury cannot set up an installment agreement if a taxpayer or account is in bankruptcy.  Treasury can accept voluntary payments from the taxpayer. These payments will not be returned to the taxpayer, even if the debt is ultimately discharged.

3. Why did Treasury keep my City Income Tax refund when I'm in bankruptcy?

Treasury's ability to withhold a taxpayer's City income tax refund is determined by the chapter under which the bankruptcy was filed.

  • Chapter 7 - The refund is held until a discharge is issued.
  • Chapter 11 (Business Filed) - Bankruptcy will offset an assessed officer's refund when:
    1. The business has defaulted in chapter 11 plan payments.
    2. The Pre-Petition debt exists and is not included for payment through the business bankruptcy.
    3. The confirmed plan will offset for Post Confirmation debt.
  • Chapter 11 (Corporate Officer filed.) - If a plan has been confirmed and there are post-confirmation debts, Treasury will apply corporate officer refunds to post-confirmation assessments.
  • Chapter 13 - Income tax refunds are returned to taxpayers.