Some taxpayers have been receiving notices from the Michigan Department of Treasury (Treasury) entitled “Michigan Business Tax (MBT) Annual Return Notice of Additional Tax Due,” adjusting information contained on the taxpayer’s return and stating that the taxpayer should send a letter, if the taxpayer disagrees with the adjustments contained in the notice. The notices do not contain statutory appeal information and state that a Notice of Intent to Assess will be issued, if the taxpayer does not respond within 30 days.

You should be aware that the Attorney General has claimed in some court cases that these notices are “determinations” that must be appealed within the time periods contained in the Michigan Revenue Act and that failure to appeal the adjustments within those time periods may mean a subsequent appeal is barred. Many taxpayers are lulled into inaction by the statement that an Intent to Assess will be issued. This, however, is a potential trap. Consider, for example, a taxpayer whose tax return claimed a $100,000 refund and who receives a notice stating that, after adjustments made by Treasury, the taxpayer actually owes $50,000. If the taxpayer waits for an Intent to Assess before appealing, although the taxpayer can timely appeal the proposed $50,000 assessment, Treasury has taken the position that the taxpayer is too late to appeal the adjustments that denied the $100,000 refund. Thus, Treasury claims that the only relief to which such a taxpayer is entitled is cancellation of the $50,000 assessment but the taxpayer has lost the $100,000 refund. Thus, if you receive such a notice, you should let us know as soon as possible.