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Taxpayer Rights During and Audit


It is not possible to audit all of the taxpayers in Michigan with the limited resources that are available. Instead, computer-generated risk assessment models are used to evaluate taxpayers for audit.

If a taxpayer is chosen for an audit, generally, an interview or visit to the taxpayer's business is required. In some cases, the taxpayer may receive a tax audit questionnaire and a request to submit copies of certain records by mail in advance of the audit start date. This is done to give the auditor a better understanding of the business activities which, in tum, can minimize the time needed to complete the audit. Taxpayers have the right to:

  • Ask that the audit take place at a reasonable time in a convenient location.
  • Represent oneself, have someone accompany him or her or, with authorization, have a third party represent the taxpayer in his or her absence.
  • Receive copies of the audit schedules that show how the auditor determined any changes to taxes due or applicable refunds.
  • Meet with the auditor or the audit supervisor to discuss the audit findings.

During the course of the audit, the auditor must adhere to the following provisions of the Jobs Provider Bill of Rights of 2006:

  1. Notify the taxpayer in writing of any refund opportunity the auditor may have identified. The taxpayer may then claim that refund under the provisions of the Revenue Act. Neither the auditor nor Treasury is required to provide detailed transactional support for refund claims or to perform any review beyond that necessary to satisfy the intended scope of the audit.
  2. A taxpayer subject to a use tax audit of purchases may offset the use tax liability determined in the audit by the sales tax paid annually to Michigan vendors in error or the use tax paid annually to vendors outside Michigan in error on an amount up to $5,000 in purchases.
  3. The audit results determine that the taxpayer has an overpayment, a Notice of Adjustments will be issued identifying the amount of overpayment Treasury believes is on the taxpayer's account. The letter informs the taxpayer of any appeal rights.
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