Michigan Sales Tax Payment Plan and Resolution
Checklist
What This Notice Means
A Michigan Sales and Use Tax payment plan or resolution notice means the state has identified a sales tax liability requiring payment, filing, or compliance action. This notice appears after the state determines that sales tax was collected but not remitted, returns were not filed, or an account shows an outstanding balance. The notice reflects a specific stage in Michigan’s collection process, in which the Department of Treasury formally notifies you of the issue and outlines available options to resolve it.
Why You Received This Notice
Michigan requires businesses and individuals who collect Sales and Use Tax to file returns and remit taxes to the Department of Treasury. When returns are not filed or payments are not made within the required timeframes, the state issues notices to initiate resolution. The state also issues notices when audits or account reviews identify unpaid sales tax liability or tax debt.
These notices are part of standard administrative collection procedures designed to bring accounts into compliance and inform taxpayers of their obligations.
What Happens If You Ignore This Notice
If you do not address a sales tax notice, the state continues collection efforts through additional notices and enforcement action for Delinquent Taxes. The outstanding balance accrues penalties and interest over time. The state may file a tax lien against property or assets, levy bank accounts, or pursue wage garnishment to recover unpaid taxes. The Michigan Department of Treasury provides at least 10 days’ notice before levies are sent to financial institutions or employers. Ignoring notices does not resolve the underlying liability and makes the situation more costly.
Step-by-Step Checklist
Step 1: Review the Notice Completely
Read the entire notice to locate the notice date, notice number, tax type, return period, and amount due. Identify the specific issue described and note any deadline dates listed on the notice.
Step 2: Verify Your Account Information
Check that your business name, address, business tax account number, and social security number or Company ID Number are correct on the notice. Confirm that the tax period matches your business records and note any discrepancies you find.
Step 3: Gather Your Sales Tax Records
Collect all sales records, returns, and payment receipts for the tax periods listed on the notice. If returns were not filed, gather sales data for taxable sales, exempt sales documentation, and tax calculation worksheets for those periods.
Step 4: Compare the Amount Claimed
Review the amount shown on the notice against your business records to determine if the Sales
Tax Rate and calculations are accurate. Check whether the state is claiming unpaid taxes, penalties, and interest, and document any discrepancies you identify.
Step 5: Contact the Department of the Treasury
Call the Sales Tax Division at the number listed on the notice or use the Toll-free (1-800) TTY
number if needed. Provide your notice number, business tax account number, or social security number when you call.
Step 6: Determine Your Agreement With the Notice
Based on your records and the state’s explanation, decide whether the tax liability claimed is accurate. If you believe the notice is incorrect, document your reasons and prepare supporting evidence for review.
Step 7: Explore Available Resolution Options
Ask the Department of the Treasury about options specific to your situation, including filing late returns, making lump-sum payments, requesting an installment agreement, or requesting penalty abatement for reasonable cause. —requestitten information about each option.
Step 8: Request Payment Plan Details if Needed
Ask the Department of the Treasury to explain the terms of any available installment agreement, including payment amounts, due dates, and total plan period. Payment plans for 24 months or less require completion of Form 990 and acceptance of the work plan.
Step 9: Obtain Correct Forms if Filing Late
Contact the Michigan Department of Treasury or use Michigan Treasury Online to obtain the correct sales tax return form for the relevant tax period. Complete the return accurately using your business records and supporting documentation for tangible personal property sales.
Step 10: Prepare Your Complete Response
Compile all relevant records, including sales documentation for taxable sales, prior returns, payment receipts, and correspondence with the state. If the notice is in error, prepare a written explanation with supporting evidence to submit.
Step 11: Submit Your Response Before the Deadline
Follow the submission method specified on the notice, which may include mail, Michigan
Treasury Online portal, or in-person delivery. Include your notice number and business tax account number on all documents you submit, and write these numbers on the memo line if making payments.
- Ignoring the notice: Not responding to a sales tax notice does not make the liability
- Missing the deadline: Sales tax notices include response deadlines, and missing these
- Submitting incomplete information: Filing late returns or installment agreement
- Not keeping copies: Failing to retain copies of the notice, your submission, and
- Assuming automatic approval: The Department of the Treasury reviews installment
- Omitting reference numbers: Always include your notice number, business tax account
- 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 12: Maintain Complete Records
Keep copies of the original notice, all supporting documents, correspondence with the
Department of Treasury, and proof of any payments or submissions. Note the date, time, and name of any state representative you contact.
Payment Options and Methods
The Michigan Department of Treasury accepts multiple payment methods for resolving sales tax debt. Payments can be made through Michigan Treasury Online via Electronic Funds Transfer or by check payable to the State of Michigan. Electronic payments provide faster processing and immediate confirmation of receipt. When submitting payments by mail, write your business tax account number and return period on the memo line to ensure proper account crediting. The
Department of the Treasury may also coordinate with the Bureau of the Fiscal Service through the Treasury Offset Program to collect Delinquent Taxes from Tax Refunds or Federal payments owed to you.
Understanding Installment Agreements
An installment agreement allows you to pay your tax debt over time through scheduled monthly payments. Payment plans for 24 months or less require completion of Form 990 and submission of a proposed work plan that will be reviewed for approval by the Treasury. Plans longer than 24 months require direct contact with the Collections Services Bureau for evaluation. Interest continues to accrue on unpaid balances during installment agreements at the statutory rate of one percentage point above the adjusted prime rate per annum. The Department of the
Treasury may file liens on property even when payment arrangements are current to protect the state’s interest.
Penalty Abatement and Relief Options
The Michigan Department of Treasury will waive penalties and interest charges if you demonstrate reasonable cause for failure to comply with filing or payment requirements.
Reasonable cause includes serious illness or death, fire or natural disaster, criminal acts against you, or erroneous written information from Treasury employees.
You must submit a written request for penalty waiver to the Collections Services Bureau containing all facts and circumstances. An Offer in Compromise program is also available, allowing eligible taxpayers to settle tax debt for less than the full amount owed based on specific financial criteria. Contact the Department of the Treasury to determine if you qualify for this program.
Common Mistakes to Avoid disappear and results in additional penalties and interest, along with collection measures for Delinquent Taxes. The state will continue enforcement efforts until the matter is resolved. deadlines may result in the state proceeding with collection action without waiting for your response. Always note and comply with stated deadlines to avoid additional penalties. applications with incomplete or incorrect information may delay resolution or result in the state rejecting your submission. Review all requirements carefully before submitting through Michigan Treasury Online or by mail. correspondence with the state makes it difficult to track your case or respond to follow-up inquiries. Maintain organized records of all documents and payment confirmations. agreement requests, and approval is not guaranteed by law. The state may require larger down payments, shorter plan periods, or additional financial information before approving requests. number, or social security number, along with the return period, on the memo line of any payment submission so the state can properly credit your account. This information ensures accurate processing of electronic payments and checks.
Important Facts to Remember
Zero returns must be filed even when no taxable sales or Sales and Use Tax were collected during a reporting period. This is a legal requirement under the Use Tax Act and in the Omnibus
Tax Act of 1967, not optional guidance. Interest accrues on unpaid balances at the rate of one percentage point above the adjusted prime rate per annum and continues during installment agreements.
Late filing or payment penalties have a combined maximum of 25 percent, with discretionary penalties of 5 percent for negligence, 25 percent for intentional disregard and 100 percent for
fraud The Michigan Department of Treasury coordinates with state agencies, including the
Department of Health and Human Services and the Bureau of the Fiscal Service, to collect delinquent debts, which may include offsetting tax refunds, federal payments through the
Treasury Offset Program for Child Support, or federal tax debt obligations.
Received a State Tax Notice?
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