Monday, July 26 2010
The Michigan Tax Tribunal has started to send out notices to property owners who had filed classification appeals. There are approximately 10,000 of such appeals. It is very important for property owners to respoind in a timely manner to the notices.
What has happened is tied to the enactment of the personal property tax credit first for SBT and now in the MBT at 35%. The amount of the credit is significant (35%) but is applicable for personal property located on a parcel classified as industrial.
The problem is inaccuracies in the classification of property. Because the credit is not available to property classified as "commercial", many taxpayers (10,000) filed appeals with their local assessor and the local Board of Review and finally the State Tax Commission. Michigan law invests with the State Tax Commission the authority to rule on classification appeals and provides that their determination is final and the property owners cannot appeal to the Michigan Tax Tribunal. However, the Department of treasury can appeal a determination of the State Commission.
Because of the enormous number of appeals and the significance of the classification to the property owner, the State Tax Commission sent the appeals to the Michigan Tax Tribunal earlier this year. The Tax Tribunal has recently started to process the appeals.
Friday, July 09 2010
I am please to announce that Dave Barrons and myself will be presenting a new industry specific seminar on October 8th at the Palace in Auburn Hills and then again on October 21st in Grand Rapids at WMU Downtown Conference Center. This completely new seminar, which will focus specifically on state tax issues of the construction contractor is jointly sponsored by the Michigan Association of CPAs (MACPA) and Construction Financial Managers Association (CFMA). Members of both associations will enjoy reduced member rates ($245) for the seminar. The best way to make sure you receive the reduced rate is to use the promotion code CFMA on the MACPA website when registering or to call the MACPA office directly at 1.888.4CPE and ask for the CPE department.
Michigan State & Local Tax for the Contractor, course code MSLTC
Friday, October 8, 2010 at the Palace, 5 Championship Drive, Auburn Hills, 48326
Michigan State & Local Tax for the Contractor, course code MSLTC1
Thursday, October 21, 2010 at the WMU Downtown Conference Center, 200 Ionia Drive SW, Grand Rapids, 49503
Registration will begin at 7:30am, each seminar begins at 8:00am and ends at 4:00pm, includes seminar manual, continental breakfast, lunch and afternoon snacks.
Thursday, July 08 2010
Michigan Department of Treasury to Outsource Auditing to Third Party Out-Of-State Audit Firm
The State of Michigan has recently launched an aggressive auditing program for Unclaimed Property and has contracted for out-of-state third party auditors to perform these audits. Since these auditors are compensated on a contingency fee basis, it results in very aggressive auditing techniques and could mean trouble for you and your company.
While traditional unclaimed property audits focused on un-cashed payroll checks and dividends, these new audits focus on account receivable and payable entries. With sophisticated software, the auditors can locate thousands of questionable journal entries and then shift the burden of proof to you to prove correcting entries were made. With open years stretching back at least a decade, and the extrapolation of the findings, the result can be an assessment in excess of one million dollars.
Tuesday, July 06 2010
A Bill for Taxes Due - Final Assessment was properly delivered to the taxpayer by certified mail to the last known address of the taxpayer. [Hatherly Associates, Inc. v. Michigan Department of Treasury, Michigan Court of Appeals, No. 291100, June 29, 2010,Michigan Court of Appeals]
A final Michigan use tax assessment for a motor home that was purchased in another state was properly delivered by certified mail to the taxpayer's last known address. Accordingly, the Michigan Court of Appeals held that the Michigan Tax Tribunal (MTT) properly dismissed the taxpayer's appeal of the assessment for lack of jurisdiction because the appeal was not timely.
The taxpayer alleged that the MTT erred when it found that the Michigan Department of Treasury satisfied the notice requirement because the department could not produce the green card proving receipt by the taxpayer. However, the requirement of certified mail to the last known address did not require production of documentation establishing proof of receipt. Rather, certified mail was a postal service classification that provided a mailing receipt to the sender and a record of delivery at the office of address. The purpose of certified mail was to record the date of mailing and to prevent stale claims.
The issue of whether the department's efforts provided legally sufficient notice was a question of law and in this case the MTT applied the law correctly. The department mailed the final assessment by certified mail, had information that the final assessment was delivered, and had no information to the contrary. There was no dispute that the department used the correct address. Therefore, the department took steps reasonably calculated to inform the taxpayer of the assessment.
Monday, July 05 2010
Congress has singled-out homebuyer credit extension relief and approved it in a last-minute move before adjourning for the July 4th holiday. The Homebuyer Assistance and Improvement Act of 2010 extends the closing date deadline from June 30, 2010 to September 30, 2010.
What does this mean for your clients? The Act enables homebuyers who signed sales contracts prior to May 1, 2010, to be able to take advantage of the homebuyer tax credit so long as they close on their home by September 30, 2010. This high-profile legislation will enable an estimated 180,000 additional homebuyers to utilize the tax credit and not be penalized by delays within the financial sector that may have caused many to miss the original June 30th closing deadline.
To pay for this relief, Congress has enacted several revenue-raising provisions:
- A delay in the transfer of Travel Promotion Board Fees
- Clarification of the bad check penalty for electronic payments
- Return-disclosure authorization to prevent homebuyer credit fraud among State prison inmates
Congress has also passed a number of other small tax code changes recently, including:
- The so-called Medicare "doc fix", which reverses a 21% cut in Medicare physician reimbursements that took effect June 1, 2010
- Pension funding relief measures that are intended to give sponsors of defined plans additional time to amortize pension funding shortfalls
- An extension of the airline ticket tax and aviation fuels tax through August 1, 2010
Thursday, July 01 2010
Public Act 103 of 2010 (PA 2010-103) extended the sunset for the Michigan International Speedway credit available against the Michigan Business Tax. It has been extended to tax years ending before January 1, 2017. Previously, the credit was available through tax years ending before January 1, 2013. For the 2012 tax year, the credit is capped at the lesser of $1.58 million (previously, $1.05 million) or the taxpayer's tax liability. For tax years that begin on or after December 1, 2012, and end before January 1, 2017, the amount of the credit is equal to the amount of capital expenditures in Michigan on infield renovation, grandstand and infrastructure upgrades, and any other construction and upgrades. During this extended availability, the credit is capped at the lesser of $1.58 million or the taxpayer's tax liability before the calculation of the credit for professional fees, additional police officers and traffic management devices to ensure traffic and pedestrian safety while hosting motorsports events. To be eligible for the extended credit, the taxpayer must spend at least $32 million on capital expenditures after 2010 and before 2016.