Michigan has enacted legislation that clarifies and streamlines a number of important tax administrative provisions. The changes affect the Department of Treasury’s ability to pursue and collect unpaid taxes from company owners and officers, successors who purchase a business having unpaid taxes, and the Department’s audit procedures. Many of these changes are significant and are generally favorable to taxpayers.
Owner and Officer Personal Liability -
Prior to this legislation, if a business liable for Michigan taxes did not file required returns or pay taxes due, any of its officers, members, managers or partners who the Michigan Department of Treasury (“Department”) determined had control or supervision of, or responsibility for, making the returns or payments were personally liable for the tax. The reason for the liability—whether willful or not—was irrelevant. This led to circumstances where a non-controlling officer with only limited administrative responsibilities could be held liable by the Department. In many cases, officers were assessed years after leaving employment with a company or long after a company completed a bankruptcy reorganization or liquidation...
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