Michigan Corporate Officer Liability for Business Taxes

Michigan Corporate Officer Liability means you personally owe unpaid Michigan business taxes. This occurs when your business fails to either file business tax returns or pay business taxes.  Corporate officer liability applies to trust taxes only: payroll, use, sales, and tobacco taxes.

Michigan Corporation Officer Liability Investigation

The State of Michigan may assess Corporation Officer Liability to:

– Owners/Officers
– Members
– Member Managers
– Partners

The State of Michigan will conduct an investigation. They will begin by mailing a letter to all individuals that may be personally liable for unpaid business taxes. The letter is titled “Letter of Inquiry, Notice of Officer Liability” or “Letter of Inquiry.” The purpose of the investigation is to gather documentation to determine corporate officer liability. If you receive a Letter of Inquiry, you do not automatically owe the business taxes. The state is gathering information to determine whether you should be held personally responsible for the unpaid business taxes.

Respond to Michigan Letter of Inquiry

If you receive a Letter of Inquiry, you have 30 days from the date of the letter to respond. This is your opportunity to submit documentation to prove you were not:

– Involved with the corporation,
– An officer of the corporation,
– Responsible for paying Michigan taxes or for filing returns on behalf of the corporation

Even if you may are not responsible for filing or paying Michigan taxes, you may know who was responsible. We recommend that you submit documentation proving that other individuals in the business were responsible for the Michigan business taxes. This will help your case.

Michigan Corporate Officer Liability Determination

You will receive a letter if the state has determined you are personally responsible for the business taxes. The letter is titled “Bill for Taxes Due (Intent to Assess).” This means the State of Michigan will pursue your personal income and assets to collect the taxes owed.

The state will issue a Bill for Taxes Due (Intent to Assess) if:

1) You did not respond to the Letter of Inquiry in 30 days or
2) The documentation was insufficient to prove you were not a responsible individual

You can dispute this determination. You have 60 days from the date of the Bill for Taxes Due letter to request an informal conference. The request must be made in writing and submitted to the Michigan Department of Treasury. The request must be sent within 60 days. We highly recommend that you mail the request using U.S. Postal certified mailing services.

State of Michigan Corporate Officer Liability Appeals

The next letter you will receive is Final Bill for Taxes Due (Final Assessment). You can contest the determination by filing an appeal. The appeal must be filed with the Michigan Tax Tribunal within 35 days of the date of the Final Bill for Taxes (Final Assessment) Letter. You can appeal all or part of the bill. If you are appealing part of the bill, then you must fully pay the uncontested portion of the bill prior to submitting the appeal.

Once the period for requesting an appeal with the Michigan Tribunal has expired, you have one final option for contesting the determination. You can file an appeal with the local County Circuit Court within 90 days of the date of the Final Bill for Taxes Due (Final Assessment) Letter. All taxes must be fully paid to file an appeal to the Court of Claims. If you win the case, you will receive a refund.

State of Michigan Collections

If your appeals options have expired and you personally owe the business taxes, the State of Michigan can send your case to collections. Collection activities may include wage levies, bank levies, filing tax liens, garnishing tax refunds, and property seizures. Your options with the State of Michigan are limited compared to the IRS. You can contact us for more information on how to address State of Michigan taxes.