Payment of the Uncontested Portion of the Tax Assessment Requirement Upheld
In Anderson v. Department of Treasury, Michigan Court of Appeals, No. 303470, August 9, 2012, the Court of Appeals concluded that a Michigan personal income taxpayer's due process rights were not violated by the statute that required prepayment of the uncontested portion of the tax assessment. The applicable statute governing the appeals of tax assessments required that the uncontested portion of the assessment be paid as a prerequisite to the appeal.
The taxpayer challenged the penalties imposed, but not the tax liability itself. However, the taxpayer did not pay any part of the assessment and, instead, argued that this law deprived him of due process. The court noted that a promise to pay the debt or partial payment were not sufficient to satisfy the statute. The court held that the tax scheme satisfied due process requirements because the taxpayer was afforded a meaningful opportunity to be heard and the state had a legitimate interest in the prompt payment of taxes such that it could condition the hearing on the prepayment of uncontested taxes. Case law has noted that the post-deprivation process satisfies due process even though the individual taxpayer is not given the opportunity for a hearing before he is deprived of the property because of the significant interest states have in their own financial stability. The prepayment helped ensure that the state could collect taxes in a timely manner.