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Liens, Levy and Warrants and Garnishments
What is a Notice of State Tax Lien?
A Notice of State Tax Lien is an instrument that gives the Michigan Department of Treasury a legal right or interest in a debtor's property, lasting usually until a debt that it secures is satisfied. A Notice of State Tax Lien may attach to real and/or personal property wherever located in Michigan. A Notice of State Tax Lien will be filed only after:
- A tax liability has been assessed.
- We sent you a Bill for Taxes Due (Intent to Assess) and/or a Final Bill for Taxes Due (Final Assessment) that tells you how much you owe in taxes; and
- Your failure to pay the debt in full within the 35 days from the date shown on your Final Bill for Taxes Due (Some Individual Income Tax debts on a payment arrangement may not be subject to liens).
Once these requirements have been met, a tax lien will be filed with the county Register of Deeds in the amount of your tax debt. Upon receipt of payment the lien is released and the Register of Deeds is notified.
The Michigan Department of Treasury, Collection Services Bureau will also file a Notice of State Tax Lien on real and personal property with the Ingham County Register of Deeds with respect to individuals and business entities who reside, or whose business is located, outside the borders of Michigan as provided with the provisions of the Revenue Act, 1941 PA 122, MCL 205.1 et seq, the State Tax Lien Registration Act, 1968 PA 203, MCL 211.681 et seq and Taxpayer Rights and Responsibilities.
What does a state tax lien do?
A Notice of State Tax Lien filed at a county Register of Deeds becomes a public record. Credit reporting agencies, legal news services and newspapers may obtain and publish the lien information. As a result, creditors may gain knowledge that the Michigan Department of Treasury has a claim against your property, including property you acquired after the lien was filed. Courts and financial institutions may use the lien to establish a claim/priority in certain situations, such as bankruptcy proceedings or during the sale of real estate.
It is important that the tax liability is resolved as quickly as possible before filing a lien becomes necessary.
A tax lien:
- will have a negative effect on your credit rating and in most cases, property, (e.g. house, car) cannot be sold or transferred until the past-due tax is paid
- is filed at a county Register of Deeds and becomes public record.
- filed against an individual or business obtained by a credit reporting agency will remain part of their credit history for the next seven to ten years.
What is the difference between a lien, levy, warrant and a garnishment?
Liens are filed with the county Register of Deeds and/or the Secretary of State as security that a debt will be paid from proceeds when a taxpayer sells real or personal property.
Levies are a specialized form of warrant and are generally used to withdraw funds from a taxpayer's financial institution account or garnish a taxpayer's wages. Levies are generally used when a taxpayer has failed to resolve a debt through voluntary payment.
Warrants are used to close a taxpayer's business and/or seize a taxpayer's real or personal property other than a financial institution account or wages. Warrants are generally used when a taxpayer has failed to resolve their debt through voluntary payments and the debt is continuing to escalate.
Garnishments are court orders or legal procedures through which the earnings or refund of an individual or entity are withheld for payment of a debt. Third-party creditors (Plaintiffs) petition the court to issue a garnishment.
Why did you place a tax lien on my property?
A tax lien was placed on your property because you are liable for a delinquent tax debt. The lien is a security for the State of Michigan, so that proceeds due you from a sale of real or personal property will be applied to the debt.
Where are the Registers of Deeds offices located?
A Register of Deeds office is located in each county. A listing of these offices is included on this Web site.
How do I get a levy released?
You will need to call the Collection Services Bureau at 517-636-5265. At that time, you may be transferred to a representative that can direct you as needed.