Every now and then the government gets it right.
Did you hear me? It happened in Michigan on June 27th. The Governor signed Public Act 240 of 2014 – which creates an Offer in Compromise program beginning January 1, 2015 for State tax obligations. The law outlines three grounds to compromise tax obligations, includes a review process and a hold on collection and enforcement pending the application. The grounds are similar to the Internal Revenue Service’s Offer in Compromise program and provide that an Offer in Compromise accepted by IRS is a ground for approval of the State request.
Is this big news? I can tell you – we’ve been addressing Tax Collection defense issues at THAV GROSS for 32 years – and for 32 years, the State Department of Treasury has not been able to compromise tax because state law precluded it. This situation has created unwarranted hardship for clients who qualified to compromise Federal taxes but were still left with the problem of either “hiding” from the State or paying them (hiding more often).
While the regulations on implementation of the law have to be drawn up – this law is a “game changer.” Before, we had to plan for the Federal taxes and have a separate plan for the State. With this change – the planning and strategies will change – but the best of it is that the Michigan taxpayer who has an unresolvable debt – can now resolve the State problem as well.
If you know anyone with a tax issue (the truth is you know many people who do, but they may not have told you!) – alert them to this change. Also, if they are going to call some tax service that has “agents” that are going to solve all their problems by charging them $7,500 on their credit card from some office located in who knows what state or city – tell them I said the following, “Are you insane? The cost is far less to solve the problem and why on earth would you use someone who is not a Michigan attorney experienced in tax collection defense. You should vest your fiscal future only with those who you meet face to face and earn your trust.”
The next time you hear one of those TV/Radio commercials, ask yourself, “What IS an agent?”
Have a great weekend and say thanks to the State for getting it right this time,