Bill Text: MI HB5519 | 2011-2012 | 96th Legislature | Introduced

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Bill Title: Taxation; administration; offer-in-compromise program; provide for. Amends sec. 28 of 1941 PA 122 (MCL 205.28) & adds sec. 23a.

Spectrum: Partisan Bill (Republican 6-0)

Status: (Introduced - Dead) 2012-03-28 - Printed Bill Filed 03/28/2012 [HB5519 Detail]

Download: Michigan-2011-HB5519-Introduced.html

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HOUSE BILL No. 5519

 

March 27, 2012, Introduced by Reps. Walsh, Cotter, Foster, Heise, Tyler and Kowall and referred to the Committee on Tax Policy.

 

     A bill to amend 1941 PA 122, entitled

 

"An act to establish the revenue collection duties of the

department of treasury; to prescribe its powers and duties as the

revenue collection agency of this state; to prescribe certain

powers and duties of the state treasurer; to establish the

collection duties of certain other state departments for money or

accounts owed to this state; to regulate the importation, stamping,

and disposition of certain tobacco products; to provide for the

transfer of powers and duties now vested in certain other state

boards, commissions, departments, and offices; to prescribe certain

duties of and require certain reports from the department of

treasury; to provide procedures for the payment, administration,

audit, assessment, levy of interests or penalties on, and appeals

of taxes and tax liability; to prescribe its powers and duties if

an agreement to act as agent for a city to administer, collect, and

enforce the city income tax act on behalf of a city is entered into

with any city; to provide an appropriation; to abolish the state

board of tax administration; to prescribe penalties and provide

remedies; and to declare the effect of this act,"

 

by amending section 28 (MCL 205.28), as amended by 2010 PA 313, and

 

by adding section 23a.

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 23a. (1) The state treasurer, or an authorized

 

representative of the state treasurer, may compromise all or any

 

part of any payment of a tax, unpaid account, or amount due the

 

state or any of its departments, institutions, or agencies, subject

 

to administration under this act including any related penalties

 

and interest if 1 or more of the following grounds exist:

 

     (a) A doubt exists as to liability.

 

     (b) A doubt exists as to collectibility.

 

     (c) A substantial probability exists that a compromise would

 

further the fair and efficient administration of the tax.

 

     (2) Except as otherwise provided under subsection (3), if the

 

state treasurer, or an authorized representative of the state

 

treasurer, compromises all or any part of any payment of a tax,

 

unpaid account, or amount due the state or any of its departments,

 

institutions, or agencies as authorized under subsection (1), he or

 

she shall place on file in the office of the state treasurer a

 

written report outlining the basis for the compromise and, at a

 

minimum, a statement of each of the following:

 

     (a) The amount of tax assessed or other amount due to this

 

state.

 

     (b) The amount of interest, additional amount, addition to the

 

tax, or assessable penalty imposed by law on the person against

 

whom the tax is assessed.

 

     (c) The amount actually paid in accordance with the terms of

 

the compromise.

 

     (3) The state treasurer, or an authorized representative of

 

the state treasurer, is not required to file a report if the

 

compromise is related to a civil case that involves an unpaid

 

amount of tax assessed, an unpaid account, or other amount due

 

including any interest, additional amount, addition to the tax, or

 

other assessable penalty that is less than $25,000.00.

 

     (4) A compromise under this section is subject to continuing

 

quality review by the state treasurer. The department may revoke

 

any compromise if the compromise was induced by fraud or perjury,

 

or if the taxpayer fails to comply with any tax payment agreement

 

within 5 years after the date the compromise is made.

 

     (5) The fact that a taxpayer received a federal compromise of

 

tax in a tax year is prima facie evidence that the same taxpayer is

 

entitled to a compromise of any similar or comparable Michigan tax

 

liability that exists, at least in a proportional amount, for the

 

tax year in which the federal compromise was granted.

 

     (6) Within 90 days after the effective date of the amendatory

 

act that added this section, the state treasurer shall do all of

 

the following:

 

     (a) Establish guidelines for the offer-in-compromise program

 

authorized under this section. If appropriate, the guidelines shall

 

be modeled after those guidelines published by the internal revenue

 

service of the United States department of treasury in regards to

 

the federal offer-in-compromise program established under section

 

7122 of the internal revenue code.

 

     (b) Establish administrative guidelines for officers and

 

employees within the department to use when making decisions on

 

whether an offer-in-compromise is appropriate.

 

     (c) Establish procedures for an independent administrative

 

review of any rejection of a proposed offer-in-compromise made by a

 

taxpayer under this section before the rejection is communicated to

 

the taxpayer.

 

     (d) Establish procedures for the appeal of any rejection of an

 

offer-in-compromise by the taxpayer.

 

     (e) Establish appropriate application fees and procedures to

 

allow for payment plans to satisfy a compromised liability.

 

     (7) The department shall disclose return information to

 

members of the general public to the extent necessary to permit

 

inspection of any accepted offer-in-compromise under this section

 

relating to the liability for a tax imposed by this state.

 

     Sec. 28. (1) The following conditions apply to all taxes

 

administered under this act unless otherwise provided for in the

 

specific tax statute:

 

     (a) Notice, if required, shall be given either by personal

 

service or by certified mail addressed to the last known address of

 

the taxpayer. Service upon the department may be made in the same

 

manner.

 

     (b) An injunction shall not issue to stay proceedings for the

 

assessment and collection of a tax.

 

     (c) In addition to the mode of collection provided in this

 

act, the department may institute an action at law in any county in

 

which the taxpayer resides or transacts business.

 

     (d) The state treasurer may request in writing information or

 

records in the possession of any other department, institution, or

 

agency of state government for the performance of duties under this

 

act. Departments, institutions, or agencies of state government

 

shall furnish the information and records upon receipt of the state

 

treasurer's request. Upon request of the state treasurer, any

 

department, institution, or agency of state government shall hold a

 

hearing under the administrative procedures act of 1969, 1969 PA

 

306, MCL 24.201 to 24.328, to consider withholding a license or

 

permit of a person for nonpayment of taxes or accounts collected

 

under this act.

 

     (e) Except as otherwise provided in section sections 23a and

 

30c, the state treasurer or an employee of the department shall not

 

compromise or reduce in any manner the taxes due to or claimed by

 

this state or unpaid accounts or amounts due to any department,

 

institution, or agency of state government. This subdivision does

 

not prevent a compromise of interest or penalties, or both.

 

     (f) Except as otherwise provided in this subdivision or in

 

subsection (6) or (7), an employee, authorized representative, or

 

former employee or authorized representative of the department or

 

anyone connected with the department shall not divulge any facts or

 

information obtained in connection with the administration of a tax

 

or information or parameters that would enable a person to

 

ascertain the audit selection or processing criteria of the

 

department for a tax administered by the department. An employee or

 

authorized representative shall not willfully inspect any return or

 

information contained in a return unless it is appropriate for the

 

proper administration of a tax law administered under this act. A

 

person may disclose information described in this subdivision if

 

the disclosure is required for the proper administration of a tax

 

law administered under this act or the general property tax act,

 

1893 PA 206, MCL 211.1 to 211.155, pursuant to a judicial order

 

sought by an agency charged with the duty of enforcing or

 

investigating support obligations pursuant to an order of a court

 

in a domestic relations matter as that term is defined in section 2

 

of the friend of the court act, 1982 PA 294, MCL 552.502, or

 

pursuant to a judicial order sought by an agency of the federal,

 

state, or local government charged with the responsibility for the

 

administration or enforcement of criminal law for purposes of

 

investigating or prosecuting criminal matters or for federal or

 

state grand jury proceedings or a judicial order if the taxpayer's

 

liability for a tax administered under this act is to be

 

adjudicated by the court that issued the judicial order. A person

 

required to disclose information under section 10(1)(j) of the

 

Michigan economic growth authority act, 1995 PA 24, MCL 207.810,

 

may disclose the information only to the individuals described in

 

that section. A person may disclose the adjusted gross receipts and

 

the wagering tax paid by a casino licensee licensed under the

 

Michigan gaming control and revenue act, 1996 IL 1, MCL 432.201 to

 

432.226, pursuant to section 18, sections 341, 342, and 386 of the

 

management and budget act, 1984 PA 431, MCL 18.1341, 18.1342, and

 

18.1386, or authorization by the executive director of the gaming

 

control board. However, the state treasurer or a person designated

 

by the state treasurer may divulge information set forth or

 

disclosed in a return or report or by an investigation or audit to

 

any department, institution, or agency of state government upon

 

receipt of a written request from a head of the department,

 

institution, or agency of state government if it is required for

 

the effective administration or enforcement of the laws of this

 

state, to a proper officer of the United States department of

 

treasury, and to a proper officer of another state reciprocating in

 

this privilege. The state treasurer may enter into reciprocal

 

agreements with other departments of state government, the United

 

States department of treasury, local governmental units within this

 

state, or taxing officials of other states for the enforcement,

 

collection, and exchange of data after ascertaining that any

 

information provided will be subject to confidentiality

 

restrictions substantially the same as the provisions of this act.

 

     (2) A person who violates subsection (1)(e), (1)(f), or (4) is

 

guilty of a felony, punishable by a fine of not more than

 

$5,000.00, or imprisonment for not more than 5 years, or both,

 

together with the costs of prosecution. In addition, if the offense

 

is committed by an employee of this state, the person shall be

 

dismissed from office or discharged from employment upon

 

conviction.

 

     (3) A person liable for any tax administered under this act

 

shall keep accurate and complete records necessary for the proper

 

determination of tax liability as required by law or rule of the

 

department.

 

     (4) A person who receives information under subsection (1)(f)

 

for the proper administration of the general property tax act, 1893

 

PA 206, MCL 211.1 to 211.155, shall not willfully disclose that

 

information for any purpose other than the administration of the

 

general property tax act, 1893 PA 206, MCL 211.1 to 211.155. A

 

person who violates this subsection is subject to the penalties

 

provided in subsection (2).

 

     (5) A person identified in section 10(1) of the Michigan

 

economic growth authority act, 1995 PA 24, MCL 207.810, who

 

receives information under section 10(1)(j) of the Michigan

 

economic growth authority act, 1995 PA 24, MCL 207.810, as

 

permitted in subsection (1)(f), shall not willfully disclose that

 

information for any purpose other than the proper administration of

 

his or her legislative duties nor disclose that information to

 

anyone other than an employee of the legislature, who is also bound

 

by the same restrictions. A person who violates this subsection is

 

responsible for and subject to a civil fine of not more than

 

$5,000.00 per violation.

 

     (6) The department shall annually prepare a report containing

 

statistics described in this subsection concerning the Michigan

 

business tax act, 2007 PA 36, MCL 208.1101 to 208.1601, for the

 

most recent tax year for which reliable return data have been

 

processed and cleared in the ordinary course of return processing

 

by the department. A copy of the report shall be provided to the

 

chairpersons of the senate and house of representatives standing

 

committees that have jurisdiction over matters relating to taxation

 

and finance, the director of the senate fiscal agency, and the

 

director of the house fiscal agency. The department shall report

 

the following information broken down by business sector and,

 

provided that no grouping consists of fewer than 10 taxpayers, by

 

firm size in compliance with subsection (1)(f) and in a manner that

 

does not result in the disclosure of information regarding any

 

specific taxpayer:

 

     (a) Apportioned business income tax base.

 

     (b) Apportioned modified gross receipts tax base.

 

     (c) Business income tax liability.

 

     (d) Use of credits.

 

     (e) Modified gross receipts tax liability.

 

     (f) Total final liability.

 

     (g) Total liability before credits.

 

     (7) A person may disclose the following information described

 

in this subsection:

 

     (a) Information required to be reported under section 455 of

 

the Michigan business tax act, 2007 PA 36, MCL 208.1455.

 

     (b) An application to enter into an agreement, a communication

 

denying an application to enter into an agreement, an agreement, a

 

postproduction certificate, a communication denying a

 

postproduction certificate, or the total amount of credits claimed

 

in a tax year under section 455 of the Michigan business tax act,

 

2007 PA 36, MCL 208.1455, notwithstanding section 455(6) of the

 

Michigan business tax act, 2007 PA 36, MCL 408.1455.

 

     (c) An application to enter into an agreement, a communication

 

denying an application to enter into an agreement, an agreement, an

 

investment expenditure certificate, a communication denying an

 

investment expenditure certificate, or the total amount of credits

 

claimed in a tax year under section 457 of the Michigan business

 

tax act, 2007 PA 36, MCL 208.1457, notwithstanding section 457(6)

 

of the Michigan business tax act, 2007 PA 36, MCL 408.1457.

 

     (d) An application to enter into an agreement, a communication

 

denying an application to enter into an agreement, an agreement, a

 

qualified job training expenditures certificate, a communication

 

denying a qualified job training expenditures certificate, or the

 

total amount of credits claimed in a tax year under section 459 of

 

the Michigan business tax act, 2007 PA 36, MCL 208.1459,

 

notwithstanding section 459(6) of the Michigan business tax act,

 

2007 PA 36, MCL 408.1459.

 

     (8) As used in subsection (1), "adjusted gross receipts" and

 

"wagering tax" mean those terms as described in the Michigan gaming

 

control and revenue act, 1996 IL 1, MCL 432.201 to 432.226.