Legislative Solution Pending to Disregarded Entity Issue
On November 15, 2011, the Michigan Department of Treasury issued its Third Revised Notice to Taxpayers Regarding Federally Disregarded Entities and the Michigan Business Tax, extending the date for affected persons to file a return or amend a return to July 1, 2012. In response to the decision in Kmart Michigan Property Services LLC v Dep't of Treasury, 283 Mich App 647 (2009), lv den 772 NW2d 421 (2009), the Department issued a notice mandating that taxpayers file amended returns under the MBT to reflect U.S. disregarded entities as separate persons.
The due date for filing, now July 1, 2012, has been extended three times by the Department. Amended returns are required even if the return results in no change in tax liability.
While the deadline for filing amended returns still exists, it appears the legislature will enact a legislative fix so that disregarded entity returns and amended returns ultimately will not be required.