Tax Audit Protest and Appeal — Michigan

Tax Audit Protest and Appeal (MICHIGAN)

Quick-Reference Summary

Part A — Informal Conference Request Letter (Form 5713 Cover)

Sender Letterhead

[TAXPAYER / FIRM NAME]
[STREET ADDRESS]
[CITY], MI [ZIP]
Phone: [____________]
Email: [____________]
Federal EIN: [____________]
Michigan Treasury Account No.: [____________]
P-Number (if applicable): [____________]

Date and Delivery

Date: [__/__/____]

Sent Via:
☐ MTO secure messaging
☐ U.S. Certified Mail, Return Receipt Requested (Tracking No. [____________])
☐ Email to [[email protected]] (confirm with assigned auditor)

To:
Michigan Department of Treasury
Hearings Division
P.O. Box 30689
Lansing, MI 48909

Re: Request for Informal Conference (Form 5713)
Taxpayer: [_____________________]
FEIN / Account No.: [_____________________]
Notice Type: Bill for Taxes Due (Intent to Assess) / Notice of Intent to Assess
Assessment / Letter ID: [_____________________]
Notice Date: [__/__/____]
Tax Type: [Sales/Use, Withholding, Michigan Business Tax (legacy), Corporate Income Tax, Individual Income Tax, Tobacco/Motor Fuel, Other]
Tax Period(s): [____________]
Disputed Tax: $[____________] / Penalty: $[____________] / Interest: $[____________]
Total Disputed: $[____________]

Body of Letter (Substantive Narrative — Attaches to Form 5713)

Dear Hearings Division:

Pursuant to MCL 205.21(2)(c) and within 60 days of the issuance of the above-referenced Notice of Intent to Assess, Taxpayer respectfully submits this Request for Informal Conference on Form 5713 (enclosed). Taxpayer disputes the proposed assessment on the following grounds:

1. Audit History and Adjustments Disputed.
[Recite audit initiation, IDR exchanges, preliminary findings, and the specific adjustments in the Intent to Assess.]

2. Specific Grounds.

A. [Substantive Issue 1].
Treasury position: [_____].
Taxpayer position: [_____].
Authority: MCL § [____]; Mich. Admin. Code R [____]; Treasury Revenue Administrative Bulletin (RAB) [____]; [case citation, e.g., Andrie Inc. v. Department of Treasury, 496 Mich. 161 (2014)].
Requested adjustment: $[__________].

B. [Substantive Issue 2].
[Same structure.]

C. Audit Sampling and Methodology.
The Department's sample / projection [describe defect: stratification error, outlier handling, period selection]. Under Treasury's audit standards and RAB [____], the sample fails to fairly reflect Taxpayer's liability. Corrected analysis at Exhibit C.

D. Statute of Limitations.
Periods [____] are time-barred under MCL 205.27a(2). The 4-year period expired on [__/__/____]; no waiver, fraud, or non-filing exception applies. ☐ Taxpayer did not execute Form 163 (Statute of Limitations Waiver). ☐ Or: Taxpayer's signed waiver is limited to periods [____] and does not extend to the assessed periods.

E. Penalty Abatement.
Treasury is requested to waive penalties under MCL 205.23(4), MCL 205.24, and the Department's penalty-waiver guidance for reasonable cause: [SPECIFY — first occurrence, reliance on professional advice, recent legal change, system/casualty event].

3. Hearing Election.
☐ Telephone conference with Hearings Division Referee
☐ Videoconference
☐ In-person conference in Lansing
☐ Decision on the written record

4. Power of Attorney. Form 151 (Authorized Representative Declaration) enclosed authorizing [REPRESENTATIVE NAME], [Mich. Bar No. / CPA license].

5. Relief Requested.
a. Vacate the Notice of Intent to Assess in full;
b. Alternatively, reduce the proposed assessment to $[__________];
c. Abate all penalties; and
d. Order such further relief as is appropriate.

Respectfully submitted,

[Signature]
[Name, Title]
Date: [__/__/____]

Enclosures:

• Form 5713 (signed)
• Form 151 Power of Attorney
• Copy of Notice of Intent to Assess
• Exhibits A–[__]: workpapers, exemption certificates, contracts, prior closing letters

Part B — Formal Protest at the Informal Conference / Post-Decision Posture

Caption

STATE OF MICHIGAN
TAX TRIBUNAL — ENTIRE TRIBUNAL DIVISION

MTT Docket No. [_________] (assigned on filing)

PETITION FOR REVIEW (MCL 205.22; MCL 205.735)

NOW COMES Petitioner, [TAXPAYER NAME], by and through undersigned counsel, and pursuant to MCL 205.22, MCL 205.735, and Mich. Admin. Code R 792.10227, respectfully petitions the Michigan Tax Tribunal for review of the Final Assessment issued by the Department of Treasury, and in support states:

1. Petitioner. Petitioner is [a/an] [individual / Michigan corporation / [State] entity authorized to do business in Michigan], FEIN [____________], with [principal place of business / residence] at [____________].

2. Respondent. Respondent is the Michigan Department of Treasury, Treasury Building, 430 W. Allegan Street, Lansing, MI 48922.

3. Jurisdiction. The Tribunal has exclusive and original jurisdiction under MCL 205.731(a) over a proceeding for direct review of a Final Assessment issued under the Revenue Act.

4. Final Assessment Under Review. On [DATE], Treasury issued a Bill for Taxes Due (Final Assessment), Letter ID [____________], assessing $[__________] tax, $[__________] penalty, $[__________] interest, for tax period(s) [____________] / tax type [____________]. Exhibit A.

5. Timeliness. This petition is filed within 60 days of the issuance of the Final Assessment as required by MCL 205.22(1). Postmark: [__/__/____].

6. Prerequisite Payment. Petitioner has paid the uncontested portion of the assessment in the amount of $[__________] on [__/__/____] as required by MCL 205.22(1). Receipt at Exhibit B.

7. Exhaustion. Petitioner timely filed Form 5713 on [__/__/____] within 60 days of the Notice of Intent to Assess, participated in the informal conference held on [__/__/____], and received the Decision and Order of Determination dated [__/__/____].

8. Statement of Facts.
[NUMBERED PARAGRAPHS — business operations, audit history, transactions at issue, Hearings Division proceedings.]

9. Issues Presented.
a. Whether [LEGAL ISSUE 1 — e.g., the equipment qualifies for the industrial processing exemption under MCL 205.94o].
b. Whether [LEGAL ISSUE 2 — e.g., sales-tax sample projection is unreasonable under RAB 2017-26].
c. Whether [LEGAL ISSUE 3 — penalty abatement under MCL 205.23(4)].
d. Whether the assessment is time-barred under MCL 205.27a(2).

10. Counts.

Count I — [Substantive Tax Issue].
[Statute, regulation, case law, application.]

Count II — Improper Audit Methodology.
[Sampling defects, projection errors; RAB references.]

Count III — Penalty Abatement.
Under MCL 205.23(4), penalties shall be waived for reasonable cause. Petitioner exercised ordinary business care and prudence because: [SPECIFIC FACTS]. See Treasury RAB 2005-3 (reasonable cause guidance).

Count IV — Statute of Limitations (MCL 205.27a).
The assessment for periods [____] is barred. The Notice of Intent was issued on [__/__/____], more than 4 years after the return-due date / filing date of [__/__/____], and no statutory exception (fraud; RAR; non-filing; waiver) applies.

11. Prayer for Relief.

WHEREFORE, Petitioner respectfully requests that the Tribunal:

a. Vacate the Final Assessment in full;
b. Alternatively, redetermine the tax to $[__________];
c. Abate all penalties;
d. Order refund of the uncontested-portion overpayment, if any, with interest under MCL 205.30;
e. Award costs and any attorney fees authorized by law;
f. Grant such further relief as is just.

Respectfully submitted,

[ATTORNEY SIGNATURE]
[Name, Michigan Bar No. P-___________]
[Firm]
[Address] / [Phone] / [Email]

Verification.
I, [NAME], being first duly sworn, depose and state that I am [the taxpayer / the officer authorized to verify] and that the matters stated in this Petition are true and correct to the best of my knowledge.

_______________________________
[Name, Title]
Subscribed and sworn before me this [__] day of [____], 20[__].
_______________________________
Notary Public, State of Michigan

Part C — Appeal Cover Letter to Tax Tribunal / Court of Claims

[FIRM LETTERHEAD]

Date: [__/__/____]

Via: ☐ MTT e-filing system (MOAHR portal) ☐ Hand delivery ☐ Certified Mail RRR

To:
Clerk, Michigan Tax Tribunal
P.O. Box 30232
Lansing, MI 48909

Copy to:
Michigan Department of Treasury — Office of General Counsel
430 W. Allegan Street, Lansing, MI 48922

And:
Michigan Attorney General — Revenue and Tax Division
P.O. Box 30754, Lansing, MI 48909

Re: [Taxpayer] v. Michigan Department of Treasury
Petition for Review — Final Assessment dated [__/__/____]
Tax Type: [____] / Period(s): [____] / Amount in Controversy: $[__________]

Dear Clerk:

Enclosed for filing pursuant to MCL 205.22 and Mich. Admin. Code R 792.10227 is Petitioner's Petition for Review, contesting the Final Assessment of the Department of Treasury dated [__/__/____] (Exhibit A). This petition is filed within 60 days of the issuance of the Final Assessment and is therefore timely.

Petitioner has paid the uncontested portion of $[__________] as required by MCL 205.22(1); proof of payment is at Exhibit B.

Enclosures:

1. Petition for Review with Verification (original)
2. Copy of Final Assessment (Exhibit A)
3. Proof of uncontested-portion payment (Exhibit B)
4. Decision and Order of Determination from Hearings Division (Exhibit C)
5. Form 5713 and informal conference correspondence (Exhibit D)
6. Form 151 Power of Attorney
7. MTT Petition Cover Sheet / Appearance of Counsel
8. Filing fee check no. [_______] in the amount of $[____] (per current MTT fee schedule, R 792.10215)
9. Certificate of Service on Treasury and Attorney General

Petitioner reserves all rights to elect or move for venue, discovery scheduling, mediation, and any further proceedings authorized by the Tribunal Rules.

Respectfully submitted,

[ATTORNEY SIGNATURE]
[Name, Michigan Bar No. P-___________]
[Firm / Address / Phone / Email]

cc: [Taxpayer]

Alternative — Court of Claims Cover Letter (MCL 205.22(1); MCL 600.6419)

To: Clerk, Michigan Court of Claims
Hall of Justice, 925 W. Ottawa Street, P.O. Box 30022, Lansing, MI 48909

Re: [Taxpayer] v. Department of Treasury — Complaint under MCL 205.22 and Court of Claims Act

Enclosed please find Verified Complaint, Notice of Intent to File Suit (MCL 600.6431(1)), proof of uncontested-portion payment, Certificate of Service on the Attorney General (MCL 600.6422), and the Court of Claims filing fee. The Complaint is filed within 90 days of the Final Assessment dated [__/__/____].

[Signature block]

Part D — Pre-Filing Checklist

Notice and Deadline Verification

☐ Identified notice type (Intent to Assess vs. Final Assessment vs. Refund Denial vs. Decision and Order)
☐ Calendared 60-day informal conference deadline from Intent to Assess
☐ Calendared 60-day MTT deadline from Final Assessment
☐ Calendared 90-day Court of Claims deadline from Final Assessment
☐ Confirmed that MTT filing within 60 days will be used INSTEAD of Court of Claims (cannot pursue both — election doctrine)
☐ For Detroit city income tax matters: confirmed 35-day MTT track applies
☐ Verified 90-day post-Final-Assessment finality window under MCL 205.22(5) has not passed

Form 5713 / Petition Preparation

☐ Form 5713 fully completed and signed; substantive narrative attached
☐ Form 151 Power of Attorney current
☐ Mailed to Hearings Division at P.O. Box 30689, Lansing, MI 48909
☐ Hearing election (telephone / video / in-person / on the record) made
☐ MTT petition includes verification, Letter ID, and Final Assessment exhibit

Prerequisite Payment

☐ Calculated uncontested portion of assessment
☐ Paid uncontested portion via MTO with reference to Letter ID
☐ Retained payment confirmation as Exhibit to petition

Substantive

☐ Audit workpapers, IDRs, exemption certificates, Form 5713 record indexed
☐ MCL 205.27a SOL verified; Form 163 waivers reviewed
☐ Identified all exemptions/credits/deductions and statutory rates at issue
☐ RAB and Treasury Letter Rulings on point pulled
☐ Reasonable-cause penalty argument supported with declarations
☐ Michigan Supreme Court / Court of Appeals tax decisions reviewed

Filing Mechanics (MTT)

☐ Petition filed in MOAHR e-filing system
☐ Filing fee paid per current schedule (Mich. Admin. Code R 792.10215)
☐ Certificate of Service on Treasury and AG Revenue Division
☐ Appearance of Counsel filed
☐ Forum selected (Entire Tribunal vs. Small Claims — non-property)

Post-Filing

☐ Confirmed Treasury answer due date (generally 28 days)
☐ Diary discovery, prehearing conference, and dispositive motion deadlines
☐ Consider mediation under MTT Rule R 792.10257
☐ Litigation hold issued to taxpayer's accounting/IT functions

Sources and References

• Michigan Department of Treasury — Appeals Process: https://www.michigan.gov/taxes/taxpayer-advocate/taxpayer-rights-rules-and-responsibilities/taxpayer-rights-and-responsibilities/taxpayer-rights/the-appeals-process---informal-conference
• Form 5713 (Request for Hearing/Informal Conference): https://www.michigan.gov/taxes/-/media/Project/Websites/treasury/Forms/2018/5713.pdf
• Form 151 (Authorized Representative Declaration): https://www.michigan.gov/taxes/-/media/Project/Websites/treasury/Forms/2009/151_478839_7.pdf
• Taxpayer's Rights During an Audit (Treasury Pub. 2315): https://www.michigan.gov/treasury/-/media/Project/Websites/treasury/Forms/2009/2315_2009.pdf
• MCL 205.21 (Audits and informal conference): http://www.legislature.mi.gov/Laws/MCL?objectName=mcl-205-21
• MCL 205.22 (Appeal procedure): https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-205-22
• MCL 205.23 (Assessment finality and penalty): http://www.legislature.mi.gov/Laws/MCL?objectName=mcl-205-23
• MCL 205.27a (Statute of limitations): http://www.legislature.mi.gov/Laws/MCL?objectName=mcl-205-27a
• MCL 205.701 et seq. (Tax Tribunal Act): http://www.legislature.mi.gov/Laws/MCL?objectName=mcl-Act-186-of-1973
• Michigan Tax Tribunal: https://www.michigan.gov/taxtrib
• MTT Rules (Mich. Admin. Code R 792.10101–.10295): https://www.michigan.gov/taxtrib/rules-and-procedures
• Court of Claims: https://courts.michigan.gov/courts/court-of-claims
• Detroit City Income Tax Hearings and Appeals: https://www.michigan.gov/taxes/coll-audit/hearings/city-income-taxes-hearings-and-appeals
• Andrie Inc. v. Department of Treasury, 496 Mich. 161 (2014) (use-tax burden)
• Vomvolakis v. Department of Treasury, 145 Mich. App. 238 (1985) (taxpayer burden)
• Klooster v. City of Charlevoix, 488 Mich. 289 (2011) (statutory construction; taxpayer burden)