- Posted by Randy Clark
- On February 28, 2014
- 0 Comments
- CNC, Federal Installment Agreement, Federal Offer, Federal Tax Debt, OIC
Michigan back taxes are not the same as back taxes for every other state. Indeed, not all tax problems are created equal. Large national tax resolution firms quite often advertise for IRS tax debts of $10,000 or more and conveniently neglect to mention the State taxes that are usually involved. When working out an Installment Agreement with the IRS, it is important to include any State Installment Agreement that you have entered into. The IRS will consider a portion of that payment based upon a calculation contained in the Internal Revenue Manual. This same calculation will also come into play when entering into an Offer in Compromise with the IRS. The IRS will allow a portion of the State Installment Agreement into the offer consideration based on that same collections formula. What is most important to know about Michigan tax problems however is that unlike most state, there is no program for a Michigan Offer in Compromise. Sad but true, if a Michigan taxpayer has to arrange an installment agreement with the State, more than likely they will have to enter into a repayment plan that takes course over no more than twenty four months. There is currently some talk in Lansing about a proposed solution to this problem which would involve the introduction of some form of State of Michigan, Offer in Compromise. Most states do have a method for resolving tax debts for less than the full amount but there is no standard formula for state to state offers. Some states require the acceptance of a Federal offer, and some states will analyze the offer on it's own. Liens, Levies, and garnishments from the State of Michigan, should be dealt with by a practitioner who is familiar with the State's method of collections. It is important to view an individual tax problem as a whole and make sure they have created a state plan that creates the most advantageous Federal Installment Agreement, CNC, or OIC as possible. If you've received any letters in the mail from the State of Michigan or are in the process of settling a federal tax debt, feel free to give a call to the tax exerts at, Michigan Tax Resolution a call. We're here to resolve your tax problems as quickly and efficiently as possible! Regards, R.C.