The 2011 Michigan Tax Amnesty Program

This website was created to explain the Michigan 2011 Tax Amnesty Program to those people who were delinquent  taxpayers.
Content is from the site's archived pages as well as other outside sources such as press releases.

Michigan 2011 Sales and Use Tax Amnesty Ending

June 7, 2011
By Susan McLain

If you are a Michigan resident, keep this date: June 30, 2011. That’s when Michigan Department of Treasury’s Tax Amnesty program for both individual taxpayers and businesses ends. According to the State, “Whatever your excuse for not paying state taxes, now you can settle up without paying any penalties.” In their unique campaign the State declares “All excuses welcome.” Regardless of whether your dog ate it or you couldn’t find any pens with ink, Michigan state encourages all taxpayers who are delinquent in paying their state taxes under the Revenue Act (PA 122 of 1941) to ante up now for all taxes due through December 31, 2009 and the penalty will be waived. In addition, the State will not pursue criminal prosecution for any taxes paid under the amnesty program. But time is running out!

In order to encourage businesses to self-audit and either register or begin to pay sales and use taxes without penalty, states have the option to enact a Voluntary Tax Amnesty Program (VTAP) such as Michigan’s. A voluntary program usually goes as follows: businesses (or residents) have a certain amount of time, usually 30-45 days, to determine if they owe sales and use taxes; if they determine liability, they are given certain incentives to begin reporting and paying that liability. Sometimes, states will relieve the business of interest, penalties and fees as well as prosecution if they deliver before the expiration date of the voluntary program.

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Types of Taxes Covered by Amnesty

Michigan’s tax amnesty program covers nearly all types of state taxes administered by the Michigan Department of Treasury, including:

  • The business tax
  • The single business tax
  • The state personal income tax
  • The withholding tax
  • The sales and use tax

Eligibility for Tax Amnesty

Taxpayers eligible for amnesty include individual and business taxpayers who have the following types of tax liabilities:
Underreported tax liabilities

  • Non-reported tax liabilities
  • Overstated deductions, credits, or exemptions
  • Failure to file Michigan tax returns
  • Delinquent payment of past due taxes
  • Taxpayers who have received a final tax due notice

Taxpayers under criminal investigation or eligible to use the state’s voluntary disclosure program are not eligible to apply for tax amnesty. Further, amnesty is not available if any of the following circumstances applies:

  • The tax is attributable to income derived from a criminal act.
  • The taxpayer is under criminal investigation, subject to criminal prosecution, or involved in a civil action in connection with that tax.

The taxpayer has been convicted of a felony under the state Revenue Act or the Internal Revenue Code.

Tax Amnesty Considerations
Michigan’s tax amnesty program has few constraints and is being administered very favorably for taxpayers compared with most state amnesty programs. For example, the Department does not prohibit taxpayers from seeking a refund of taxes paid under amnesty, thus allowing taxpayers to remit tax during the amnesty period and then seek a refund later if they want to contest the underlying tax technical issue with the Department.

Other Considerations
The Michigan tax amnesty program is an opportunity not to be missed by taxpayers with underpaid Michigan taxes that will otherwise likely result in penalties being imposed if the taxes were remitted outside of amnesty. Taxpayers should carefully follow the rules issued by the Michigan Department of Treasury for seeking amnesty and remember that interest stops accruing when the tax, return, and other materials are submitted pursuant to the tax amnesty program.

If you have always paid your taxes on time, you probably have never given a thought about the type of Tax Amnesty Program that Michigan among other states offered delinquent tax payers in 2011. I know I hadn't until I receved a paniced call from my mother. My mother said she had just opened a letter that said she owed the Internal Revenue Service $30,000 and the government had put a lien against her. It threatened she could lose her property and that additional penalties and interest could put her in even deeper debt. She was frightened and confused. I was confused since I always helped her with her taxes. The letter mentioned a settlement amount of $5,000 on her $30,000 debt and urged her to call. But it also told her to disregard the notice if she didn't owe the money. The letter went on to say that the company, which appeared to be a collection agency, had gotten the information about her supposed tax debt from public records. I called my lawyer friend Ron, but he told me he was part of a team of maritime attorneys, and not a tax lawyer, but we were desparate for help, so he asked me for details to see if he could suggest a solution. He also asked if she had received any delinquency notices from the IRS. No. He then suggested that I call her county courthouse to check for a lien. No lien. Ron said he suspected a scam, since he knew she had paid her federal and state taxes, and told my mother to ignore the letter and if she received a phone call from the company who sent the letter, just to get a name and phone number and he would handle it. She never heard from the company again. This was so obviously a scam that even a maritime lawyer could tell there was something fishy about that call. Now there are many people who are delinquent with their payment of taxes for any number of reasons. I think the Michigan Amnesty program was great, although you would have had to know about it, in order to take advantage.
FYI: In 2017 Pennsylvania is offering a tax Amnesty program from April 21, 2017 through June 19, 2017, to all eligible taxpayers and waive all penalties and one-half interest if the taxpayer is able to pay the underlying tax and the one-half interest that was assessed. I hope I never find myself in a situation where I would be grateful to be eligible for an tax amnesty program. To learn more about the state of Michigan's 2011 tax amnesty program continue reading. It's informative even though the info is from 2011.

 

     
  The 2011 Tax Amnesty Program is an opportunity for delinquent taxpayers to pay their state taxes and have their penalty charges waived. Taxpayers who qualify would also avoid criminal prosecution by the Michigan Department of Treasury.
 

     
  The Tax Amnesty Program runs from May 15, 2011 through June 30, 2011. The complete amnesty application and full payment, including interest, must be postmarked by June 30th to be eligible, but taxpayers are encouraged to apply early to avoid the continued accrual of interest.
 

     
  All state taxes administered under the Revenue Act (PA 122 of 1941) are eligible for amnesty, including Income Tax, Michigan Business Tax, Sales Tax, Use Tax, Withholding Tax, and others. Tax periods covered under amnesty are limited to tax periods ending on or before December 31, 2009.  Local taxes, including property taxes, are not eligible for amnesty.
 

     
  To apply for Tax Amnesty, an Amnesty Application (Form 3855) and full payment of all taxes and interest due must be postmarked to the Department of Treasury by June 30, 2011. Full instructions and all the necessary forms are available on the Tax Amnesty How to Apply page.
 

   
•  Frequently Asked Questions
•  Tax Amnesty Estimator
•  Collections Process for Delinquent Taxes

 

Frequently Asked Questions

 

What is Tax Amnesty?
    The Michigan Tax Amnesty program provides a 45-day window for taxpayers to settle tax liabilities with the State, for return periods ending on or before December 31, 2009 and avoid penalty payments. Qualifying taxpayers also avoid civil and criminal penalties and prosecution by the Michigan Department of Treasury.
 
       
When will Tax Amnesty be available?
    The Tax Amnesty period begins May 15, 2011 and ends June 30, 2011.
 
       
Who is eligible for Tax Amnesty?
   

Tax Amnesty is available for individual or business taxpayers who have tax liabilities for eligible taxes for return periods ending on or before December 31, 2009. This includes:

  • Underreported tax liabilities
  • Non-reported tax liabilities
  • Overstated deductions, credits, or exemptions
  • Failure to file Michigan tax returns
  • Delinquent payment of past due taxes
  • Taxpayers who have received a final tax due notice
 
       
Who is not eligible for Tax Amnesty?
   

Individuals and business taxpayers are not eligible for Tax Amnesty if they are:

  • The subject of a current tax-related Court of Claims case or criminal investigation
  • Eligible to enter into a Voluntary Disclosure agreement with the State

 
   
What incentives are available under Tax Amnesty?
    Qualifying taxes and interest, which are paid under the Tax Amnesty program, will have penalty waived, and the Department will not pursue criminal prosecution relating to taxes paid under Tax Amnesty.
 
What are the consequences if I do not participate in the Tax Amnesty?
    A taxpayer who is eligible for Tax Amnesty and who does NOT apply for Tax Amnesty during the Tax Amnesty period is liable for any tax, accumulated interest, and penalty due. Civil penalties will not be waived and criminal prosecution may be sought.
 
       
What taxes qualify for Tax Amnesty?
    Taxes covered under Tax Amnesty
 
       
What types of tax obligations do not qualify for Tax Amnesty?
    Any taxes for return periods ending after December 31, 2009 do not qualify for Tax Amnesty. Also, local (e.g., city, county) taxes, including real and personal property taxes, do not qualify for Tax Amnesty.
 
       
How do I apply for Tax Amnesty?
   

In order to obtain Tax Amnesty, a taxpayer must submit the following:

  • A completed Tax Amnesty Application (Form #3855)
  • All un-filed tax returns for which you are requesting Tax Amnesty
  • Amended returns if applicable
  • A completed Registration for Michigan Taxes (Form #518), if you are a business taxpayer and the business is not registered
  • Full payment of all tax and interest due

The Tax Amnesty Application, applicable returns, and full payment must be postmarked no later than June 30, 2011 to qualify.

In order to stop the accumulation of interest, a taxpayer should file and pay as soon as the Tax Amnesty period begins.

 
     

 

How much am I required to pay when I apply for Tax Amnesty?
    Your total tax due and interest must be paid and postmarked no later than the end of the Tax Amnesty period of June 30, 2011.
 
       
How do I obtain forms for Tax Amnesty?
    You may obtain forms, instructions, and other Tax Amnesty information at www.mitaxamnesty.org or by calling the Michigan Department of Treasury's toll-free Amnesty hotline at 1-855-466-4829.
 
       
What forms of payment will be accepted?
   

The following payment options are being accepted:

  • Check
  • Money order
  • Payments made in person at a Treasury Field Office

No credit card or debit card payments will be accepted. DO NOT send cash through the mail.

 
       
Where do I send my Tax Amnesty Application and payment?
   

The completed Tax Amnesty Application (Form #3855), applicable returns, and full payment should be mailed to:

Michigan Department of Treasury 
Tax Amnesty
P.O. Box 30710
Lansing, MI 48909

The information must be postmarked no later than June 30, 2011. The check or money order should be payable to the "State of Michigan" for the total tax and interest due. Write your account number or Social Security Number and the word "Amnesty" on your check/money order.

 
       
What if I only owe penalty?
    Penalty only assessments are eligible for a penalty waiver under Tax Amnesty. The taxpayer must submit a Tax Amnesty Application (Form #3855) postmarked no later than June 30, 2011.
 
       
What happens if I apply for Tax Amnesty, but do not qualify?
    The Department of Treasury will notify you in writing if your request for Tax Amnesty has been denied.
 
       
Can Amnesty be denied?
   

Tax Amnesty may be denied for any of the following:

  • Not filing the required returns
  • Not remitting the required payment of tax and interest
  • Not submitting returns and payments for periods covered by Tax Amnesty
  • Not filing the Tax Amnesty Application by the deadline of June 30, 2011
  • Not fully completing a Tax Amnesty Application (e.g., Social Security Number not included on application)

Failure to pay all of the tax and interest due will result in Tax Amnesty being denied. If Tax Amnesty is denied, civil penalties will not be waived and criminal prosecution may be sought.

If you are eligible to enter into a Voluntary Disclosure agreement with the Michigan Department of Treasury, you are not eligible for Tax Amnesty. If you have questions regarding Voluntary Disclosure, visit www.mitaxamnesty.org or call 1-855-466-4829.

Furthermore, Tax Amnesty is not available if any of the following circumstances apply:

  • The tax is attributable to income derived from a criminal act
  • The taxpayer is under criminal investigation or involved in a civil action or criminal prosecution for that tax
  • The taxpayer has been convicted of a felony under the Revenue Act or the Internal Revenue Code

 

 

If Tax Amnesty is denied, will the payment I send with the application be refunded?
    Payments received will be applied to any tax liabilities or other outstanding debt you may have. If any balance remains, it will be refunded.
 
       
Are payment arrangements available under Tax Amnesty?
    No. Full payment of taxes and interest must be made and postmarked no later than the end of the Tax Amnesty period of June 30, 2011.
 
       
What will happen if I pay too much?
    If you paid more than the tax and interest due, any over-payment will be applied to other outstanding debt you may have. If any balance remains, it will be refunded.
 
       
Where can I obtain more information about Tax Amnesty?
    You may obtain additional Tax Amnesty information by visiting www.mitaxamnesty.org or by calling the Michigan Department of Treasury's toll-free Amnesty hotline at 1-855-466-4829.
 
       
Will returns filed under Tax Amnesty be audited?
    Returns filed under Tax Amnesty are subject to audit as any other tax return may be.
 
       
Are excessive refund claims eligible for Tax Amnesty?
    If a taxpayer made or received an excessive claim for refund for any qualifying taxes for return periods ending on or before December 31, 2009, the taxpayer can repay the excessive refund, plus interest, without penalty being charged. All unpaid penalties will be waived and the Department will not pursue criminal prosecution relating to taxes paid under Tax Amnesty.
 
       
What if an eligible period is currently under audit?
   

Taxpayers under audit who want to file for Tax Amnesty must remit the full amount of the tax due, interest, and submit a completed Tax Amnesty Application (Form #3855) to the auditor during the May 15, 2011 through June 30, 2011 Tax Amnesty period. The audit will include any applicable penalty which will be waived at the time the audit is processed.

For audits that will not be completed by the end of the Amnesty period, the taxpayer may prepare an amended return, a Tax Amnesty Application (Form #3855), and remit full payment of the tax and interest due to the auditor during the Tax Amnesty period. Applicable penalty would only be applied to any additional tax determined due upon completion of the audit.

 
       
Can I apply for Tax Amnesty if I have requested an informal conference?
   

Tax Amnesty is available for those who are in the informal conference process. You must submit a Tax Amnesty Application (Form #3855) and full payment of the tax and interest due postmarked no later than June 30, 2011; the informal conference process will proceed as otherwise scheduled.

Tax Amnesty is not available to taxpayers under tax-related criminal investigation, criminal prosecution, or who have been convicted of a felony under the Revenue Act or the Internal Revenue Code.

 

Am I eligible for Tax Amnesty if I am currently litigating a case in the Michigan Tax Tribunal, Court of Claims, or the Appellate courts, or am in informal conference before the Department of Treasury?
    A taxpayer litigating a case before the Michigan Tax Tribunal or the Appellate courts or in informal conference before the Department of Treasury is eligible for Tax Amnesty provided the taxpayer files the Tax Amnesty Application (Form #3855) and pays in full the tax and interest due, postmarked no later than June 30, 2011. The taxpayer may continue litigating their case before the Michigan Tax Tribunal or their appeal before the Appellate courts or pursue informal conference before the Department if the Tax Amnesty is granted. A taxpayer that has already paid the tax, interest, and penalty they are contesting in order to litigate in the Court of Claims is not eligible for Tax Amnesty.
 
       
I was an officer of a corporation that went out of business without paying all taxes due. I was assessed the amount of the corporation's unpaid taxes as well as penalty and interest charges. Am I eligible for penalty waiver under Amnesty?
    Yes. An officer of a corporation, who is personally liable for the corporation's tax liability, is eligible for a penalty waiver under Tax Amnesty. An Officer must complete the "For Individuals Only" section of the Tax Amnesty Application (Form #3855).
 
       
Can I use a pending income tax refund to pay a Tax Amnesty liability?
    Tax refund offsets that occur during the Tax Amnesty period May 15, 2011 through June 30, 2011 may apply toward Tax Amnesty; provided, the taxpayer files the Tax Amnesty Application (Form #3855), required tax returns, and makes full payment of tax and applicable interest, postmarked no later than June 30, 2011.

MITaxAmnesty.org