The Michigan Tax Offset
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Michigan Tax Offset Overview
The U.S. Treasury Offset Program (TOP) is used by the State Of Michigan to collect back taxes among other things. Michigan Department Of Treasury (MDOT) collaborating with TOP intercepts federal tax refunds and federal payments to pay Michigan unpaid taxes. As a result, Michigan Taxpayers have their Federal refunds and Federal payments due taken.
How will I know?
You receive notice of intent to offset that your unpaid tax will be sent to TOP if not paid within 60 days. The name(s) of the state agency that requested the action are included in notice.
What is a Michigan Treasury Offset?
MDOT intercepts your Federal tax refund or Federal payments due and applies it to your unpaid taxes. If the amount collected doesn’t satisfy the liability, you may be liable for additional offsets. If the amount intercepted doesn’t require full amount due to satisfy the liability, you receive the remaining amount due from the IRS.
Interception Amounts/Percent for Tax Liabilities
- Federal Tax Refund: Up to 100% for state income tax and unemployment
- Vendor and Federal Employee Travel Related Payments: Up to 100% for all liabilities
- State Payments for All Types: Up to 100% for federal non-tax liabilities
What should I do?
Within 60 days from receiving the letter, pay the balance in full, or go to Michigan.gov/collection service to pay online. Submit proof of payment if all or portion has been paid. Send proof and supporting documentation to P.O. Box 30168, Lansing, MI 48909. Include a detailed letter explaining why state is in error and tax not due.
I’m current on installment agreement with State will they still intercept?
Yes, the State intercepts funds until the back taxes are paid in full.
I file joint returns with spouse who received offset. Am I responsible?
No, however they still take your portion of the refund. You need to complete IRS Form 8379 Injured Spouse Allocation and send it to IRS to get your portion of refund.
I paid Michigan State taxes in full and refund was still offset.
MDOT can’t prevent an interception once notified by Bureau of Fiscal Services. You receive a refund of any over-payment when everything posts to your account.
Who do I call at TOP?
Contact the TOPS call center at (800) 304-3107 with questions about your notice.
I don’t have money to pay?
You should contact the Michigan Treasury and try to resolve your situation by applying for a Payment Plan, Offer in Compromise or Non-Collectable status. Don’t ignore this notice though, or you will likely receive an offset.
Need help with a State of Michigan Tax Problem?
Our qualified team of Michigan Tax Attorneys, Accountants and EA’s at The W Tax Group will get you the answers you need.
