Frequently Asked Questions

Who should I notify when I file bankruptcy?

Send Notices of Bankruptcy to:

                Michigan Department of Treasury

                Collection/Bankruptcy Unit

                P.O. Box 30168

                Lansing, MI  48909

 

Why am I receiving billings while I am in bankruptcy?

  • New assessments are issued. Both an intent to assess and a final assessment must be system issued before an assessment can be changed to bankruptcy status.
  • The debt was not dischargeable in bankruptcy, which caused the assessment to be changed to a collectible status.
  • Actual returns were filed, assessments were corrected, and a letter was issued showing the corrected amount.
  • Treasury is not aware of the bankruptcy.

Why am I being assessed debt for an amount higher than the amount I owe? 

If returns have not been filed for certain periods, debt will be computed for those missing periods.  To ensure accurate assessment amounts, please confirm all returns have been filed with Michigan Department of Treasury.  Returns [1] should be sent to:

                Michigan Department of Treasury

                Collection/Bankruptcy Unit

                P.O. Box 30168

                Lansing, MI  48909

[1] If a Notice of Unfiled return has been filed with the Bankruptcy court, returns should be given to your attorney to forward to the Attorney General’s office listed on the Notice.

Why did Michigan Department of Treasury keep my income tax refund when I am in bankruptcy?

Michigan Department of Treasury's ability to withhold a taxpayer's 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.

Am I able to set up an installment agreement while in bankruptcy?

No. Michigan Department of 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.

Am I able to file for an Offer in Compromise while in bankruptcy?

No.  Michigan Department of Treasury cannot set up an Offer in Compromise if a taxpayer or account is in bankruptcy