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Taxpayers Can Now Appeal Tax Disputes To A Court Without First Paying Tax, Penalties, and Interest

June 17, 2015
Tax Advisory

Michigan Taxpayers Now Have A Right To Appeal Tax Disputes to The Michigan Courts – Pre-Deprivation: SB 100 Enacted To Eliminate The Prepayment Requirement For Appeals To The Michigan Court Of Claims.

On June 16, 2015, Governor Rick Snyder signed into law Enrolled SB 100, which will eliminate the requirement that taxpayers pay all tax, penalties and interest before they can have their tax appeals heard by a court of law. This new law opens Michigan's court system to all Michigan taxpayers, and guarantees that taxpayers have their "day in court" before they are required to pay tax assessments.

Prior to the enactment of Enrolled SB 100, taxpayers had two options to appeal a tax assessment or tax decision that was adverse to them: they could appeal the case to the Michigan Tax Tribunal without paying amounts that were in dispute; or they could appeal the case to the Michigan Court of Claims, but only after paying ALL amounts of taxes, penalties, and interest assessed, including amounts that were being contested. This dichotomy with respect to whether disputed taxes were required to be pre-paid created two very different alternatives for taxpayers. And in many cases, taxpayers were effectively denied access to the court system simply because the disputed tax assessments were too large to pre-pay – even if the taxpayer might ultimately win in court.

After many years of review and discussion regarding the un-parallel appeal options for tax disputes, Michigan – with the support of the Michigan Chamber of Commerce and various legal and business groups – enacted SB 100 to effectively "level the playing field" between the two appellate alternatives for taxpayers. Based on the provisions included in the new law, it will become effective in late March or early April of 2016.

Please contact Wayne D. Roberts at 616/336-6892 or if you have questions about this, or other tax matters.

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