June 21, 2006, Introduced by Rep. Newell and referred to the Committee on Tax Policy.
A bill to amend 1941 PA 122, entitled
"An act to establish the revenue collection duties of the
department of treasury; to prescribe its powers and duties as the
revenue collection agency of the state; to prescribe certain
powers and duties of the state treasurer; to regulate the
importation, stamping, and disposition of certain tobacco
products; to provide for the transfer of powers and duties now
vested in certain other state boards, commissions, departments
and offices; to prescribe certain duties of and require certain
reports from the department of treasury; to provide procedures
for the payment, administration, audit, assessment, levy of
interests or penalties on, and appeals of taxes and tax
liability; to prescribe its powers and duties if an agreement to
act as agent for a city to administer, collect, and enforce the
city income tax act on behalf of a city is entered into with any
city; to provide an appropriation; to abolish the state board of
tax administration; to prescribe penalties and provide remedies;
and to declare the effect of this act,"
by amending section 27a (MCL 205.27a), as amended by 2003 PA 23.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
1 Sec. 27a. (1) If a person liable for a tax administered
2 under this act sells out his or her business or its stock of
1 goods or quits the business, the person shall make a final return
2 within 15 days after the date of selling or quitting the
3 business. The purchaser or succeeding purchasers, if any, who
4 purchase a going or closed business or its stock of goods shall
5 escrow sufficient money to cover the amount of taxes, interest,
6 and penalties as may be due and unpaid until the former owner
7 produces a receipt from the state treasurer or the state
8 treasurer's designated representative showing that the taxes due
9 are paid, or a certificate stating that taxes are not due. Upon
10 the owner's written waiver of confidentiality, the department may
11 release to a purchaser a business's known tax liability for the
12 purposes of establishing an escrow account for the payment of
13 taxes. If the purchaser or succeeding purchasers of a business or
14 its stock of goods fail to comply with the escrow requirements of
15 this subsection, the purchaser is personally liable for the
16 payment of the taxes, interest, and penalties accrued and unpaid
17 by the business of the former owner. The purchaser's or
18 succeeding purchaser's personal liability is limited to the fair
19 market value of the business less the amount of any proceeds that
20 are applied to balances due on secured interests that are
21 superior to the lien provided for in section 29(1).
22 (2) A deficiency, interest, or penalty shall not be assessed
23 after the expiration of 4 3 years after the date set for the
24 filing of the required return or after the date the return was
25 filed, whichever is later. The taxpayer shall not claim a refund
26 of any amount paid to the department after the expiration of 4
27 years after the date set for the filing of the original return. A
1 person who has failed to file a return is liable for all taxes
2 due for the entire period for which the person would be subject
3 to the taxes not to exceed a 3-year period the first year of
4 which is the immediately preceding tax year. If a person subject
5 to tax fraudulently conceals any liability for the tax or a part
6 of the tax, or fails to notify the department of any alteration
7 in or modification of federal tax liability, the department,
8 within 2 years after discovery of the fraud or the failure to
9 notify, shall assess the tax with penalties and interest as
10 provided by this act, computed from the date on which the tax
11 liability originally accrued. The tax, penalties, and interest
12 are due and payable after notice and hearing as provided by this
13 act.
14 (3) The running of the statute of limitations is suspended
15 for the following:
16 (a) The period pending a final determination of tax,
17 including audit, conference, hearing, and litigation of liability
18 for federal income tax or a tax administered by the department
19 and for 1 year after that period.
20 (b) The period for which the taxpayer and the state
21 treasurer have consented to in writing that the period be
22 extended.
23 (4) The running of the statute of limitations is suspended
24 only as to those items that were the subject of the audit,
25 conference, hearing, or litigation for federal income tax or a
26 tax administered by the department.
27 (5) If a corporation, limited liability company, limited
1 liability partnership, partnership, or limited partnership liable
2 for taxes administered under this act fails for any reason to
3 file the required returns or to pay the tax due, any of its
4 officers, members, managers, or partners who the department
5 determines, based on either an audit or an investigation, have
6 control or supervision of, or responsibility for, making the
7 returns or payments is personally liable for the failure. The
8 signature of any corporate officers, members, managers, or
9 partners on returns or negotiable instruments submitted in
10 payment of taxes is prima facie evidence of their responsibility
11 for making the returns and payments. The dissolution of a
12 corporation, limited liability company, limited liability
13 partnership, partnership, or limited partnership does not
14 discharge an officer's, member's, manager's, or partner's
15 liability for a prior failure of the corporation, limited
16 liability company, limited liability partnership, partnership, or
17 limited partnership to make a return or remit the tax due. The
18 sum due for a liability may be assessed and collected under the
19 related sections of this act.
20 (6) Notwithstanding the provisions of subsection (2), a
21 claim for refund based upon the validity of a tax law based on
22 the laws or constitution of the United States or the state
23 constitution of 1963 shall not be paid unless the claim is filed
24 within 90 days after the date set for filing a return.
25 (7) Subsection (6) does not apply to a claim for the refund
26 of a tax paid for the 1984 tax year or a tax year after the 1984
27 tax year on income received as retirement or pension benefits
1 from a public retirement system of the United States government
2 if the claimant waives any claim for the refund of such a tax
3 paid for a tax year before 1984. Claims for refunds to which this
4 subsection applies shall be paid in accordance with the following
5 schedule:
6 Refunds for Payable on
7 tax year: or after:
8 1988 and 1987 July 1, 1990
9 1986 July 1, 1991
10 1985 July 1, 1992
11 1984 July 1, 1993