Taxpayers (individuals and businesses) who cannot fully pay Michigan income tax should consider a instalment (AI) agreement. The Michigan Department of the Treasury (DOT) offers payment agreements or payment plans. A instalment payment agreement is simply a payment plan with the DOT that allows the taxpayer to make monthly payments on taxes owing. However, taxpayers who take advantage of this option must take into account the interest and penalties that continue to accumulate. Taxpayers who cannot pay in full should compare the cost of the installment payment option with other alternatives. For example, personal loans, home equity loans, and loans from friends and family members. Taxpayers who have rejected a Michigan Compromise Offer (OCI) or who do not meet OIC requirements should also consider a payment agreement in instalments. The DOT accepts all requests for a instalment payment agreement without further financial request, when the taxpayer pays the full amount of taxes due within 24 months. In other words, the taxpayer does not have to prove expenses and income. Unlike the optimized IRS rate agreement, the DOT does not provide a liability threshold for the implementation of this plan.
I. As discussed above, penalties and interest will continue to apply. In addition, the taxpayer must complete Form 990 – Payment Agreement. The taxpayer must propose a payment amount for approval and make the proposed payments during the period for which the DOT reviews the impact assessment. The State of Michigan has its own Streamline Instalmentment Agreement program. The state will accept a staggered agreement to pay the tax balance due in 24 months or less. The State does not set an upper limit on the amount of taxes due. All tax returns do NOT need to be filed to enter into a Streamline instalment payment agreement with the State of Michigan. Of course, it is advisable to file any missing tax return so that all tax balances due are included in the payment plan. The taxpayer (business or individual) must obtain Form 168 – Intention to Assess or Form 168 – Final Assessment from the CSB (Collection Services Office) to meet one of the eligibility standards for a instalment payment agreement.
In addition, it is recommended that the taxpayer file any unfiled tax returns to ensure that all tax obligations are included in the instalment payment agreement. If a taxpayer still has open insolvency, the DOT cannot enter into a instalment payment agreement. Once the DEPARTMENT has approved an ATI application, the taxpayer will receive a confirmation letter. The confirmation letter describes the due date, the amount of the monthly payment and contains payment coupons. Taxpayers who pay by check or money order must go to the State of Michigan – OC and include their account number on their check. The account number can be a Social Security number, a FEIN or DOT account number. Taxpayers can also pay by ETF or electronic money transfer. If taxpayers prefer this method of payment, they must complete Form 3798 and attach it to the submission of the instalment payment agreement. Finally, taxpayers can also make instalment payments via the Internet.
The IRS and the State of Michigan have programs to help you pay for unpaid tax credits. You can set up a installment payment contract. The IRS and the State of Michigan have different payment agreement programs. A remittance agreement is a payment plan to pay unpaid tax credits at a monthly rate. The IRS or the State of Michigan will not take any other enforcement action, such as wage garnishments, levies, or property seizures, provided you meet the payment schedule. There are no penalties for prepayment of taxes. You have the option to make additional or larger payments to pay taxes earlier. Penalties and interest continue to accrue during the instalment payment agreement. Although the taxpayer has actively entered into a remittance agreement with the DOT, the DOT will suspend all enforcement collection measures. However, if the State of Michigan has not yet filed a tax lien when the taxpayer requests the instalment payment agreement, the DOT will file it with the acceptance of the instalment payment agreement. In addition, penalties and interest will continue to apply.
The DOT will also apply income tax refunds (offsets) or credits to taxpayer liability. If a taxpayer with an active instalment payment agreement subsequently submits a compromise offer and the DOT confirms receipt, the taxpayer does not have to make instalment payments while the order is pending. You can apply for a instalment payment agreement with the State of Michigan as soon as your tax credit is collected. The tax balance will be added to the collections after receipt of a letter entitled “Invoice for taxes due”. The easiest way to set up a payment plan with the state is to call the interface at 517-241-5060 or call the Michigan Accounts Receivable Collection System (MARCS) at 800-950-6227. In the case of instalment claims where the taxpayer does not pay the full amount of taxes due within 24 months, the DOT will conduct a financial review of the taxpayer. Individual taxpayers must file Form 990 and Form 3189 – Collection Information Return – Person with the Application for an Instalment Contract. The DEPARTMENT uses the information contained in Form 3189 to conduct a financial analysis. The financial analysis helps the DOT determine the maximum amount the taxpayer can afford per month. The DOT uses “financial standards,” similar to what the IRS uses for housing, utilities, food, household items, clothing, and more.
Taxpayers can find the DOT`s financial standards here. If a taxpayer owes taxes to the state of Michigan, working with a tax professional can simplify the process. A tax professional can assess whether an CEW is the best option based on the taxpayer`s tax and financial situation. If you need a CEW for more than 2 years, the DOT will take into account your income, expenses and assets. It is important to ensure that taxpayers submit their financial information accurately to the Department of Transport. The DOT uses this information to determine what you can afford. To request a free quote or tax advice from a tax professional who has experience with Michigan state tax matters, click here or start your search below. The taxpayer can also call 517-241-5060.
Alternatively, they can contact a licensed tax professional to set up a plan on their behalf. If the Michigan Accounts Receivable Collection System has contacted the taxpayer, the taxpayer should contact the taxpayer directly to request or set up a instalment payment agreement. There are two ways to set up a Streamline payout agreement. You can call the IRS at 800-829-1040 or set up the payment plan online at irs.gov. When you access irs.gov, select the Payment tab at the top. The following website has a section called “Can`t Pay Now?” In this section, there is a link to the online payment agreement. Due to the recent state of emergency, the Treasurer`s Office has changed the country enrolment schedule as described below. The IRS has a program called streamline instalmentment agreement.
This program applies to tax credits of less than $25,000. Before you can set up a Streamline remittance contract, you must comply with all IRS tax returns. This means that all required tax returns must be filed. As part of the Simplified payment agreement, you can enter into an agreement to repay taxes in 72 months or less. You can determine the amount of the monthly payment by dividing the total taxes due by the number of months requested. As a veteran, you can purchase a no-deposit payment plan before March 15 of each year, provided you can provide one of the following documents: This plan is for people in financial difficulty, with documented evidence. To enter this expansion plan, you must own the property and have a deed registered in your name. Include your Social Security number and tax year on the check or money order. Please click on the links below to download our program flyers. Payment PlansPayer Assistance Programs Payments can be made prior to receipt of a letter of intent or final return for taxes due using Michigan`s electronic personal income tax payment system.
Eligible taxpayers who have received a letter from the Wayne County Treasurer`s Office can register online by clicking on the link below and entering their parcel identification number or real estate address. Click here to register Taxpayer`s Guide for COUNTRIES The REGSPA plan is accessible to everyone and is designed for properties that are not owned by the owner. The REGSPA plan allows a taxpayer to pay taxes according to a payment plan. The plan avoids foreclosure if payments are submitted according to the agreed schedule. To be effective, the plan must be signed by the taxpayer and the treasurer`s office. The REGSPA payment plan is available online for taxpayers eligible for this type of plan. Please click on the link below and enter your parcel number or real estate address to verify your eligibility for REGSPA. Eligible taxpayers will see the REGSPA button on the screen. The IRSPA plan is designed for owner-occupied real estate (the deed is in your name and it is your principal residence). .