Michigan Tax Debt Collection Notice: Response
Checklist
Introduction
Michigan taxpayers with unpaid tax liabilities may receive collection notices from the Michigan
Department of Treasury, including a Notice of Intent to Assess or Bill for Taxes Due. These formal documents indicate that the state plans to pursue collection through enforcement measures such as wage garnishment, bank levies, or property liens. Understanding these notices and responding promptly can help preserve payment options and prevent escalated collection actions. This checklist provides a step-by-step guide to effectively addressing
Michigan tax collection notices.
What This Notice Means
A collection notice from Michigan Treasury informs taxpayers that unpaid tax debt exists and that enforcement action may follow if the balance remains unpaid. The notice identifies the tax type, tax period, and total amount due, including penalties and interest that have accumulated.
This document represents a transition from routine billing to formal collection procedures under
Michigan law, signaling that the state intends to take administrative action to recover the debt if voluntary payment is not received.
Why Michigan Treasury Issued This Notice
Michigan issues collection notices when taxpayers have not responded to previous billing statements or when Michigan Individual Income Tax Returns show unpaid balances. The state must provide formal notice before implementing certain enforcement tools such as wage levies or bank account seizures. Under Michigan Compiled Law 205.25, if a tax liability remains unpaid for ten days after a demand for payment, the State Treasurer may issue a warrant and begin enforcement collection actions against the taxpayer’s real property and personal assets.
Types of Tax Debts Subject to Collection
Michigan Treasury pursues collection for various unpaid obligations that may appear on collection notices. Understanding which tax type appears on your notice helps determine the appropriate response and available resolution options.
- Michigan Income Tax obligations: Unpaid balances from Michigan Individual Income
Tax Returns, underpayment penalties, and interest charges result in collection notices.
The Department of the Treasury coordinates with the Internal Revenue Service to verify income reporting and identify discrepancies that may trigger additional assessments.
- Estimated Payments deficiencies: Taxpayers who fail to make required quarterly
estimated payments face penalties when their annual tax liability exceeds $500.
Michigan Income Tax Act provisions require adequate estimated payments throughout the year to avoid underpayment penalties and interest charges.
- Tax refund offsets: Your Michigan tax refund may be offset to satisfy debts owed to
state agencies, including the Department of Health and Human Services or other governmental subdivisions. Form 743 allows non-obligated spouses to request income allocation when joint refunds are subject to offset for one spouse’s debt.
Step-by-Step Response Checklist
Step 1: Review the Notice Completely
Read the entire document carefully to identify the specific tax type, tax year, total amount owed, and any response deadline mentioned. Note the contact information provided for the Michigan
Department of Treasury office handling your case.
Step 2: Verify the Debt Amount
Compare the amount stated on the notice with your own tax records, including filed returns, payment receipts, and previous correspondence. Document any discrepancies or amounts you believe are incorrect for discussion with Treasury officials.
Step 3: Gather Related Documents
Collect all previous notices, bills, and letters from the Michigan Treasury regarding this tax debt.
Organize relevant forms such as the Michigan Pension Schedule Form 4884, Michigan Home
Heating Credit Claim documents, and Schedule of Total Household Income if your debt involves these credits or deductions.
Step 4: Contact Michigan Treasury Promptly
Call the phone number listed on the notice or visit the official Michigan Treasury website to reach the Collections Service Bureau at 517-636-5265. Have your Social Security number or tax identification number and all relevant documents available when you contact them.
Step 5: Discuss Payment Options
Ask Treasury representatives about available payment arrangements, including installment agreements. For agreements lasting 48 months or less, you must complete and return Form
990, including a proposed payment amount, for Treasury review and approval.
Step 6: Request Hardship Consideration
Inquire whether you qualify for penalty abatement, interest relief, or other hardship programs if you have valid reasons for nonpayment. Explain your financial situation clearly and ask what documentation Treasury requires to evaluate your eligibility.
Step 7: Document All Communications
Keep detailed records of every phone call, email, and letter exchanged with Michigan Treasury.
Write down the date, time, representative’s name, and discussion summary for each contact to maintain a complete communication history.
Step 8: Submit Written Response
Send a formal written response to the address listed on the notice, including your name, address, taxpayer identification number, and a clear description of your request. Reference the notice date and account number in your correspondence.
Step 9: Maintain Payment Records
If you submit payment by check or money order, write your account number and tax year on the payment. Mail payments only to the official address provided on Treasury documents to ensure proper processing and crediting to your account.
- Liens on real property: The Collections Service Bureau files liens on real property and
- Referral to other agencies: Unresolved tax debts may be referred to the attorney
- Financial institution levies: Treasury may impose levies against financial institutions,
- Ignoring the notice completely: Failing to respond or take action typically results in
- Missing stated deadlines: Overlooking response deadlines eliminates certain options
- Assuming payment was received: Verifying that Michigan Treasury has properly
- Sending information to wrong addresses: Using unofficial addresses or outdated
- Confusing unclaimed refunds with debts: If you receive notice that your tax refund
- State tax notice review and response
- Penalty and interest reduction options
- Payroll and trust fund tax assistance
- Payment plan and relief eligibility review
- Representation with state tax agencies
Step 10: Follow Up Consistently
After submitting your response or payment arrangement request, follow up within two weeks to confirm receipt and processing. Continue monitoring your case status until you receive written confirmation from Michigan Treasury regarding your payment plan or resolution.
Potential Enforcement Actions
The Michigan Treasury may pursue various collection methods if taxpayers do not respond to notices or establish payment arrangements. Understanding these enforcement tools helps taxpayers recognize the importance of prompt action. personal property to protect the state’s interest as a creditor. Liens are filed even when taxpayers have made payment arrangements and are current with all payments, affecting credit ratings and property transfers. general for additional legal action or to contracted collection agencies. The Michigan
Department of Treasury currently works with Coast Professional Inc. to collect delinquent tax, penalty, and interest owed to state agencies. requiring them to send held funds to the state up to the total past-due amount. Financial
institutions may charge processing fees and may have funds for up to 30 days before remitting payment to Michigan.
Common Mistakes to Avoid enforcement proceedings without delay, including wage garnishment, bank levies, or property liens. Treasury will move forward with collection measures if taxpayers do not make contact or establish payment arrangements. and may accelerate enforcement actions. Always note any deadline prominently and respond well before the date specified to preserve all available resolution options. credited your payment is essential, as payments in transit may not appear immediately.
Contact Treasury to confirm receipt and application of any payment you have submitted. contact information can result in your correspondence being lost or delayed. Always use the official address printed on your Treasury notice or listed on the Michigan Treasury website. check was not cashed, return the required affidavit promptly or contact the Unclaimed
Property Division. Unclaimed funds are transferred to this division after September 1st each year if taxpayers do not respond.
Conclusion
Responding promptly to Michigan tax collection notices preserves your payment options and may prevent enforcement actions, such as wage garnishment or bank levies. Understanding the notice type, verifying the debt amount, and maintaining clear communication with the
Collections Service Bureau are essential steps in resolving unpaid tax liabilities. Taking action demonstrates your willingness to address the debt and can help you establish manageable payment terms with Michigan Treasury.
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