Overview
This section explores the process of denying a principal residence exemption and appeal rights under MCL 211.7cc. It examines statutory definitions, case law interpretations, and practical implications for property owners, assessors, and legal practitioners.
A denial of a principal residence exemption is a statutory process by which a claim for a principal residence exemption is rejected as a result of the taxpayer not meeting the eligibility requirements for the principal residence exemption.
Under MCL 211.7cc, both local and state authorities have the power to deny the principal residence exemption. Specifically, the local assessor and Michigan Department of Treasury may deny a claim for a principal residence exemption per MCL 211.7cc(6) and (8). Likewise, under MCL 211.7cc(11), if a county elects to audit principal residence exemptions, the county treasurer (or his or her designee) or the county equalization director (or his or her designee) may deny a claim for a principal residence exemption.
A denial of a principal residence exemption is restricted to the current calendar year and the three preceding calendar years and must follow statutory procedures listed in MCL 211.7cc to ensure notice and due process. Appeals depend on who issued the denial. If a local assessor or county official issued the denial, the taxpayer must file an appeal with the Michigan Tax Tribunal within thirty-five days from the date of the denial. If the denial was issued by the Michigan Department of Treasury, the taxpayer must file an appeal to the Department within thirty-five days from the date of receipt of the denial notice.
Denial of a Principal Residence Exemption and Appeal Rights: Frequently Asked Questions
- Does the Michigan Department of Treasury have the authority to deny a principal residence exemption?
Yes. In accordance with MCL 211.7cc(8), the Michigan Department of Treasury may deny a claim for a principal residence exemption.
- Does the assessor have the authority to deny a principal residence exemption?
Yes. In accordance with MCL 211.7cc(6), the assessor may deny a new or existing claim.
- Does the county have the authority to deny a principal residence exemption?
Yes. If a county elects to audit principal residence exemptions, in accordance with MCL 211.7cc(11), the county treasurer (or his or her designee )or the county equalization director (or his or her designee) may deny an existing claim for a principal residence exemption.
- Which years can a principal residence exemption be denied by an assessor, county or Michigan Department of Treasury?
A denial may be issued for the current calendar year and the three preceding calendar years. ((MCL 211.7cc(6)(8) and (11)).
- Is there a form that the Michigan Department of Treasury must use when denying a principal residence exemption?
No. MCL 211.7cc(8) only requires that the Michigan Department of Treasury issue a notice of denial in writing stating the reason for the denial and advising the owner that the denial may be appealed to the Michigan Department of Treasury within 35 days of receipt of the notice of denial.
- Is there a form that an assessor and county must use when denying a principal residence exemption?
Yes. The assessor must use Notice of Denial of Principal Residence Exemption (Form 2742), and the county must use Form Notice of Denial of Principal Residence Exemption (Form 4075). These forms must be fully completed and include the reason(s) for denial.
- Where can an assessor and county obtain these forms (Form 2742 and 4075)?
Both forms are available online at www.michigan.gov/PRE. They must use the most current versions.
- Who must the Michigan Department of Treasury notify of a denial of the principal residence exemption?
The Michigan Department of Treasury must notify the property owner, local assessor, local treasurer and county treasurer. A denial notice must be sent to the owner. The local assessor, local treasurer and county treasurer are provided with a denial spreadsheet.
- Who must the assessor notify of a denial of the principal residence exemption?
The assessor must notify the property owner and the county treasurer of the denial by providing a copy of the Notice of Denial of Principal Residence Exemption (Form 2742). A copy must also be sent to the Michigan Department of Treasury only if requested. Refer to the form for filing instructions.
- Who must the county notify of a denial of the principal residence exemption?
The county must notify the property owner and the assessor of the denial by providing a copy of the Notice of Denial of Principal Residence Exemption (Form 4075). A copy must also be sent to the Michigan Department of Treasury only if requested. Refer to the form for filing instructions.
- Where can a taxpayer appeal a denial of a principal residence exemption issued by the Michigan Department of Treasury?
A denial issued by the Michigan Department of Treasury must be appealed to Michigan Department of Treasury. See Questions 13–22 for details on Michigan Department of Treasury appeals.
- Where can a taxpayer appeal a denial of a principal residence exemption issued by an assessor or county?
A denial issued by an assessor or county must be appealed to the Michigan Tax Tribunal. See Questions 23-27 for details on Michigan Tax Tribunal appeals.
- How can a taxpayer initiate an appeal with the Michigan Department of Treasury?
A taxpayer initiates an appeal by submitting a written request for an informal conference to the Michigan Department of Treasury, stating reasons for disagreement. The taxpayer should include any supporting documents. Appeals and supporting documents can be emailed to PRE@michigan.gov or mailed to: Michigan Department of Treasury, Principal Residence Exemption Unit, P.O. Box 30440, Lansing, MI 48909.
- What supporting documentation should a taxpayer submit before an informal conference?
A taxpayer should provide proof of ownership (e.g., warranty deed, quit claim deed, land contract, or full trust copy) and proof of occupancy for each year denied. Acceptable occupancy documents include both sides of a Michigan driver’s license, voter registration, vehicle registration, utility or cable bills, bank statements, or medical bills showing the property address.
- When must a taxpayer appeal a denial from the Michigan Department of Treasury?
A taxpayer must appeal a denial from Michigan Department of Treasury within 35 days of receipt of the notice of denial. (MCL 211.7cc(8)). Late appeals may be dismissed.
- Can an attorney, assessor, county treasurer, or other representative appeal a denial from the Michigan Department of Treasury on a taxpayer’s behalf?
Yes. An attorney, assessor, county treasurer, or other representative may appeal on a taxpayer’s behalf if an Authorized Representative Declaration (Power of Attorney, Form 151) is on file with the Michigan Department of Treasury.
- How does a taxpayer know if an appeal has been received by the Michigan Department of Treasury?
The taxpayer will receive an Appeal Received letter from the Michigan Department of Treasury.
- How will a taxpayer know when an informal conference is scheduled?
The taxpayer will receive certified mail notice of the date for the informal conference at least 20 days before the informal conference.
- What if a taxpayer is unable to make the date or time of scheduled informal conference?
A taxpayer may request to reschedule an informal conference in writing at least 48 hours before the scheduled time. Requests are granted only for reasonable cause. If the taxpayer does not participate, the conference will proceed without them.
- Does the taxpayer have to appear in person at the informal conference?
Informal conferences are conducted by telephone. If a taxpayer wishes to appear in person, a written request must be submitted indicating the taxpayer wants an in-person hearing.
- How long are informal conferences?
Informal conferences last 30 minutes. The taxpayer and the Michigan Department of Treasury each get 10 minutes to present their case and 5 minutes each of rebuttal time.
- Are informal conferences recorded?
Generally, the informal conferences are not recorded. However, at the party's own expense and with advance written notice to the other party, a taxpayer or the Michigan Department of Treasury, or both, may make an audio recording of an informal conference.
- Can a taxpayer withdraw a request for an informal conference?
A taxpayer who requested an informal conference may withdraw it anytime by submitting written notice to the Michigan Department of Treasury. After receiving the withdrawal, the department will issue a decision and order of determination.
- Will the taxpayer be notified of the decision regarding the appeal during the informal conference?
Yes. After the informal conference, the Hearing Referee sends a written recommendation to the Bureau of Tax Policy Director, who issues a Final Decision and Order of Determination. The Hearings Division mails the written recommendation and Final Decision and Order of Determination by certified mail to the taxpayer’s last known address.
- What if the taxpayer disagrees with the final decision of the Hearings Division of the Michigan Department of Treasury?
A taxpayer may appeal a final decision of the Michigan Department of Treasury to the Michigan Tax Tribunal.
- How can a taxpayer initiate an appeal with the Michigan Tax Tribunal?
An appeal to the Michigan Tax Tribunal of a denial by an assessor or county or a final decision by the Michigan Department of Treasury can be initiated by the timely filing of a petition form, Petition for Denial of Exemption for Principal Residence/Qualified Agricultural, with the Michigan Tax Tribunal. A $25.00 filing fee may be required. The taxpayer can obtain a petition form online at www.michigan.gov/taxtrib.
- When must a taxpayer appeal an assessor or county denial or a Michigan Department of Treasury final decision to the Michigan Tax Tribunal?
A taxpayer must appeal a denial or final decision to the Michigan Tax Tribunal’s Residential and Small Claims Division within 35 days of the denial or final decision. (MCL 211.7cc(13)). Late appeals may be dismissed.
- Can an assessor, county or Michigan Department of Treasury withdraw a denial of a principal residence exemption issued in error?
No. The taxpayer must appeal to the Michigan Tax Tribunal within 35 days from the date of the denial. If both parties agree the denial was incorrect, they may file a stipulation with the Tribunal using the “Stipulation for Entry of Consent Judgment (Principal Residence Exemption)” form located at www.michigan.gov/taxtrib.
- Where can a taxpayer appeal a Michigan Tax Tribunal decision?
For a Proposed Opinion and Judgment, file exceptions with the Michigan Tax Tribunal. For a Final Opinion and Judgment, file a Motion for Reconsideration with the Michigan Tax Tribunal or a file a claim of appeal with the Michigan Court of Appeals.
- Where can a taxpayer learn more about the Michigan Tax Tribunal rules and appeal process?
A taxpayer can obtain more information about the Michigan Tax Tribunal rules and appeal process online at www.michigan.gov/taxtrib or may call the Michigan Tax Tribunal at 517-335- 9760.
