On October 5, 2010, a tax amnesty program was signed into law by Michigan governor Jennifer Granholm. Michigan's tax amnesty program will run from May 15, 2011, through June 30, 2011. Amnesty participants will have all civil and criminal penalties waived. Unlike many amnesty programs, there is no penalty for failure to participate in the amnesty program.
Who is Eligible for Michigan Tax Amnesty?
This amnesty program covers tax debts that were due on or before December 31, 2009. Eligible tax debts are those that are caused by three things: (1) failure or refusal to file a tax return, (2) failure to pay tax, or (3) an excessive claim for refund.
A taxpayer cannot receive amnesty if:
- The taxpayer is eligible to enter into a voluntary disclosure agreement with the Michigan Department of the Treasury
- The tax is attributable to income derived from a criminal act
- The taxpayer is under criminal investigation or involved in a lawsuit or criminal prosecution for the tax
- The taxpayer has been convicted of a felony under the Michigan Revenue Act or the Internal Revenue Code of 1986. That would be a felony related to either Michigan tax law or federal tax law.
Tax Types Covered by Amnesty
Tax debts that are eligible for tax amnesty include these taxes that are administered by the Michigan Department of the Treasury:
- Individual Income Tax
- Inheritance Tax
- Michigan Business Tax
- Motor Fuel Tax
- Sales and Use Tax
- Single Business Tax
- Severance on Oil and Gas Tax
- Tobacco Products Tax
State Required to Notify Eligible Taxpayers
The Michigan Department of the Treasury is required to notify eligible taxpayers about the amnesty program no later than April 15, 2011. The notification is supposed to include information about the amnesty program and instructions on how to find forms online. If you believe you are eligible to participate, but do not receive a notice, contact the Michigan Department of Treasury.
How to Apply for Michigan Tax Amnesty
To participate in the amnesty program, you will have to submit forms and payment within the amnesty period (after May 15, 2011, but before June 30, 2011). This is what you have to do:
- Submit a request to participate in the amnesty program to the Michigan Department of the Treasury. This will be done on a specified form to be issued by the state.
- File original or amended return(s)
- Pay all associated taxes and interest in full
Michigan Tax Amnesty Resources
- Amnesty page at the Michigan Department of Treasury
- Tax amnesty application package (Michigan Form 3855, pdf, 2 pages)
- Supplemental amnesty schedule (Michigan Form 3874, pdf 1 page)
- Frequently asked questions about the Michigan amnesty
- Michigan tax forms for previous years
- Interest calculator to estimate interest on Michigan taxes owed for the amnesty program
Source: Deloitte
More information: read Michigan Senate Bill 884