If you currently Google Michigan Offer in Compromise ("OIC"), the first link is to a page on the Michigan Department of Treasury website that explains that "The Department of Treasury is prohibited by law from compromising the tax or principal balance on debts owed to the State of Michigan. Interest is considered to be a cost of doing business and is rarely waived. Penalty waivers are occasionally granted provided reasonable cause is established."
Thankfully, this won't be the case anymore. HR 4003 is a bill in the Michigan Legislature that was recently passed by both houses that directs the Michigan Department of Treasury to allow for the compromise of "all or any part of any payment of a tax subject to administration under this act including any related penalties and interest."
One June 17, 2014, HR 4003 was presented to Governor Snyder. He signed the bill on June 21, 2014, and it was filed with the Secretary of State on June 27th. It has been assigned PA 240'14 and will take immediate effect.
This has been a long time coming and will benefit Michigan residents immensely. In the past, if you were unable to pay your tax bill, you would need to request a non-collectable status. More often than not, the State (or MARCS) would reject this and require at least a nominal payment.
However, now they don't need to...if this OIC program is done correctly. The Act states that the Michigan treasurer has 180 days to establish guidelines for the program. These guidelines should be modeled after the guidelines for the federal OIC program. Seeing as how the federal OIC program is a living breathing monster that continues to evolve, and is also affected by the training (or lack thereof) each IRS Offer Specialist receives, I am curious to see the final guidelines and how the program will be implemented. Over the next few months, I will be reviewing and commenting on different parts of the Act, as well as looking for any information the state will provide, to keep a dialogue going. Please feel free to comment, ask questions, and provide information you have found.
Thankfully, this won't be the case anymore. HR 4003 is a bill in the Michigan Legislature that was recently passed by both houses that directs the Michigan Department of Treasury to allow for the compromise of "all or any part of any payment of a tax subject to administration under this act including any related penalties and interest."
One June 17, 2014, HR 4003 was presented to Governor Snyder. He signed the bill on June 21, 2014, and it was filed with the Secretary of State on June 27th. It has been assigned PA 240'14 and will take immediate effect.
This has been a long time coming and will benefit Michigan residents immensely. In the past, if you were unable to pay your tax bill, you would need to request a non-collectable status. More often than not, the State (or MARCS) would reject this and require at least a nominal payment.
However, now they don't need to...if this OIC program is done correctly. The Act states that the Michigan treasurer has 180 days to establish guidelines for the program. These guidelines should be modeled after the guidelines for the federal OIC program. Seeing as how the federal OIC program is a living breathing monster that continues to evolve, and is also affected by the training (or lack thereof) each IRS Offer Specialist receives, I am curious to see the final guidelines and how the program will be implemented. Over the next few months, I will be reviewing and commenting on different parts of the Act, as well as looking for any information the state will provide, to keep a dialogue going. Please feel free to comment, ask questions, and provide information you have found.
