June 20, 2013, Introduced by Rep. Cavanagh 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 this state; to prescribe certain
powers and duties of the state treasurer; to establish the
collection duties of certain other state departments for money or
accounts owed to this state; 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 sections 25 and 28 (MCL 205.25 and 205.28), section 25
as amended by 2002 PA 657 and section 28 as amended by 2010 PA 313,
and by adding section 30d.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 25. (1) The state treasurer, or an authorized
representative of the state treasurer, may cause a demand to be
made on a taxpayer for the payment of a tax, unpaid account, or
amount due the state or any of its departments, institutions, or
agencies, subject to administration under this act. If the
liability remains unpaid for 10 days after the demand and
proceedings are not taken to review the liability, the state
treasurer or an authorized representative of the state treasurer
may issue a warrant under the official seal of that office. Except
as provided in subsection (5), the state treasurer or an authorized
representative of the state treasurer, through any state officer
authorized to serve process or through his or her authorized
employees, may levy on all property and rights to property, real
and personal, tangible and intangible, belonging to the taxpayer or
on which a lien is provided by law for the amount of the
deficiency, and sell the real and personal property of the taxpayer
found within the state for the payment of the amount due, the cost
of executing the warrant, and the additional penalties and
interest. Except as provided in subsection (6), the officer or
agent serving the warrant shall proceed upon the warrant in all
respects and in the same manner as prescribed by law in respect to
executions issued against property upon judgments by a court of
record. The state, through the state treasurer or an authorized
representative of the state treasurer, may bid for and purchase any
property sold pursuant to this section.
(2) A person who refuses or fails to surrender any property or
rights to property subject to levy, upon demand by the state
treasurer or an authorized representative of the state treasurer,
is personally liable to the state in a sum equal to the value of
the property or rights not surrendered, but not exceeding the
amount due for which the levy was made, together with costs and
interest on the sum at the rate provided in section 23(2) from the
date of the levy. Any amount, other than costs, recovered under
this subsection shall be credited against the liability for the
collection of which the levy was made.
(3) In addition to the personal liability imposed by
subsection (2), if a person required to surrender property or
rights to property fails or refuses to surrender the property or
rights to property without reasonable cause, the person shall be
liable for a penalty equal to 50% of the amount recoverable under
subsection (2), none of which penalty shall be credited against the
liability for the collection of which the levy was made.
(4) A person in possession of, or obligated with respect to,
property or property rights subject to levy and upon which a levy
has been made who, upon demand of the state treasurer or an
authorized representative of the state treasurer, surrenders the
property or rights to property or discharges the obligation to the
state treasurer or an authorized representative of the state
treasurer or who pays a liability under subsection (1) shall have
his or her obligation to a person delinquent in payment of a tax or
other account reduced in an amount equal to the property or rights
to property surrendered or amounts paid to the state.
(5) There shall be exempt from levy under this section:
(a) For an unpaid tax, the type of property and the amount of
that property as provided in section 6334 of the internal revenue
code of 1986.
(b) For an unpaid account, or amount due the state or any of
its departments other than an unpaid tax, disposable earnings to
the extent provided in section 303 of title III of the consumer
credit
protection act, 82 Stat. 163, 15 U.S.C. USC 1673.
(c) The effect of a levy on salary or wages shall be
continuous from the date the levy is first made until the liability
out of which the levy arose is satisfied.
(6) A warrant-notice of levy may be served by certified mail,
return receipt requested, on any person in possession of, or
obligated with respect to, property and rights to property, real
and personal, tangible and intangible, belonging to the taxpayer or
on which a lien is provided by law. The date of delivery on the
receipt shall be the date the levy is made. A person may, upon
written notice to the state treasurer, have all notices of levy by
mail sent to 1 designated office.
(7) A levy under this section shall not be made on the
property of any taxpayer with respect to any unpaid tax under the
income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.713, during
the period that an offer-in-compromise under section 30d is
pending.
Sec. 28. (1) The following conditions apply to all taxes
administered under this act unless otherwise provided for in the
specific tax statute:
(a) Notice, if required, shall be given either by personal
service or by certified mail addressed to the last known address of
the taxpayer. Service upon the department may be made in the same
manner.
(b) An injunction shall not issue to stay proceedings for the
assessment and collection of a tax.
(c) In addition to the mode of collection provided in this
act, the department may institute an action at law in any county in
which the taxpayer resides or transacts business.
(d) The state treasurer may request in writing information or
records in the possession of any other department, institution, or
agency of state government for the performance of duties under this
act. Departments, institutions, or agencies of state government
shall furnish the information and records upon receipt of the state
treasurer's request. Upon request of the state treasurer, any
department, institution, or agency of state government shall hold a
hearing under the administrative procedures act of 1969, 1969 PA
306, MCL 24.201 to 24.328, to consider withholding a license or
permit of a person for nonpayment of taxes or accounts collected
under this act.
(e) Except as otherwise provided in section 30c or 30d, the
state treasurer or an employee of the department shall not
compromise or reduce in any manner the taxes due to or claimed by
this state or unpaid accounts or amounts due to any department,
institution, or agency of state government. This subdivision does
not prevent a compromise of interest or penalties, or both.
(f) Except as otherwise provided in this subdivision or in
subsection (6) or (7), an employee, authorized representative, or
former employee or authorized representative of the department or
anyone connected with the department shall not divulge any facts or
information obtained in connection with the administration of a tax
or information or parameters that would enable a person to
ascertain the audit selection or processing criteria of the
department for a tax administered by the department. An employee or
authorized representative shall not willfully inspect any return or
information contained in a return unless it is appropriate for the
proper administration of a tax law administered under this act. A
person may disclose information described in this subdivision if
the disclosure is required for the proper administration of a tax
law administered under this act or the general property tax act,
1893 PA 206, MCL 211.1 to 211.155, pursuant to a judicial order
sought by an agency charged with the duty of enforcing or
investigating support obligations pursuant to an order of a court
in a domestic relations matter as that term is defined in section 2
of the friend of the court act, 1982 PA 294, MCL 552.502, or
pursuant to a judicial order sought by an agency of the federal,
state, or local government charged with the responsibility for the
administration or enforcement of criminal law for purposes of
investigating or prosecuting criminal matters or for federal or
state grand jury proceedings or a judicial order if the taxpayer's
liability for a tax administered under this act is to be
adjudicated by the court that issued the judicial order. A person
required to disclose information under section 10(1)(j) of the
Michigan economic growth authority act, 1995 PA 24, MCL 207.810,
may disclose the information only to the individuals described in
that section. A person may disclose the adjusted gross receipts and
the wagering tax paid by a casino licensee licensed under the
Michigan gaming control and revenue act, 1996 IL 1, MCL 432.201 to
432.226, pursuant to section 18, sections 341, 342, and 386 of the
management and budget act, 1984 PA 431, MCL 18.1341, 18.1342, and
18.1386, or authorization by the executive director of the gaming
control board. However, the state treasurer or a person designated
by the state treasurer may divulge information set forth or
disclosed in a return or report or by an investigation or audit to
any department, institution, or agency of state government upon
receipt of a written request from a head of the department,
institution, or agency of state government if it is required for
the effective administration or enforcement of the laws of this
state, to a proper officer of the United States department of
treasury, and to a proper officer of another state reciprocating in
this privilege. The state treasurer may enter into reciprocal
agreements with other departments of state government, the United
States department of treasury, local governmental units within this
state, or taxing officials of other states for the enforcement,
collection, and exchange of data after ascertaining that any
information provided will be subject to confidentiality
restrictions substantially the same as the provisions of this act.
(2) A person who violates subsection (1)(e), (1)(f), or (4) is
guilty of a felony, punishable by a fine of not more than
$5,000.00, or imprisonment for not more than 5 years, or both,
together with the costs of prosecution. In addition, if the offense
is committed by an employee of this state, the person shall be
dismissed from office or discharged from employment upon
conviction.
(3) A person liable for any tax administered under this act
shall keep accurate and complete records necessary for the proper
determination of tax liability as required by law or rule of the
department.
(4) A person who receives information under subsection (1)(f)
for the proper administration of the general property tax act, 1893
PA 206, MCL 211.1 to 211.155, shall not willfully disclose that
information for any purpose other than the administration of the
general property tax act, 1893 PA 206, MCL 211.1 to 211.155. A
person who violates this subsection is subject to the penalties
provided in subsection (2).
(5) A person identified in section 10(1) of the Michigan
economic growth authority act, 1995 PA 24, MCL 207.810, who
receives information under section 10(1)(j) of the Michigan
economic growth authority act, 1995 PA 24, MCL 207.810, as
permitted in subsection (1)(f), shall not willfully disclose that
information for any purpose other than the proper administration of
his or her legislative duties nor disclose that information to
anyone other than an employee of the legislature, who is also bound
by the same restrictions. A person who violates this subsection is
responsible for and subject to a civil fine of not more than
$5,000.00 per violation.
(6) The department shall annually prepare a report containing
statistics described in this subsection concerning the Michigan
business tax act, 2007 PA 36, MCL 208.1101 to 208.1601, and part 2
of the income tax act of 1967, 1967 PA 281, MCL 206.601 to 206.699,
for the most recent tax year for which reliable return data have
been processed and cleared in the ordinary course of return
processing by the department. A copy of the report shall be
provided to the chairpersons of the senate and house of
representatives standing committees that have jurisdiction over
matters relating to taxation and finance, the director of the
senate fiscal agency, and the director of the house fiscal agency.
The department shall report the following information broken down
by business sector and, provided that no grouping consists of fewer
than 10 taxpayers, by firm size in compliance with subsection
(1)(f) and in a manner that does not result in the disclosure of
information regarding any specific taxpayer:
(a) Apportioned business income tax base.
(b) Apportioned modified gross receipts tax base.
(c) Business income tax liability.
(d) Use of credits.
(e) Modified gross receipts tax liability.
(f) Total final liability.
(g) Total liability before credits.
(7) A person may disclose the following information described
in this subsection:
(a) Information required to be reported under section 455 of
the Michigan business tax act, 2007 PA 36, MCL 208.1455.
(b) An application to enter into an agreement, a communication
denying an application to enter into an agreement, an agreement, a
postproduction certificate, a communication denying a
postproduction certificate, or the total amount of credits claimed
in a tax year under section 455 of the Michigan business tax act,
2007 PA 36, MCL 208.1455, notwithstanding section 455(6) of the
Michigan business tax act, 2007 PA 36, MCL 408.1455.
(c) An application to enter into an agreement, a communication
denying an application to enter into an agreement, an agreement, an
investment expenditure certificate, a communication denying an
investment expenditure certificate, or the total amount of credits
claimed in a tax year under section 457 of the Michigan business
tax act, 2007 PA 36, MCL 208.1457, notwithstanding section 457(6)
of the Michigan business tax act, 2007 PA 36, MCL 408.1457.
(d) An application to enter into an agreement, a communication
denying an application to enter into an agreement, an agreement, a
qualified job training expenditures certificate, a communication
denying a qualified job training expenditures certificate, or the
total amount of credits claimed in a tax year under section 459 of
the Michigan business tax act, 2007 PA 36, MCL 208.1459,
notwithstanding section 459(6) of the Michigan business tax act,
2007 PA 36, MCL 408.1459.
(8) As used in subsection (1), "adjusted gross receipts" and
"wagering tax" mean those terms as described in the Michigan gaming
control and revenue act, 1996 IL 1, MCL 432.201 to 432.226.
Sec. 30d. (1) The department may compromise any civil or
criminal case arising under the income tax act of 1967, 1967 PA
281, MCL 206.1 to 206.713, before referring the case to the
attorney general for prosecution or defense. The attorney general
may compromise any such case after the case has been referred to
the attorney general for prosecution or defense.
(2) The department and the attorney general may compromise a
civil or criminal case described in subsection (1) only if 1 of the
following is met:
(a) If the amount of the delinquent tax, interest, and penalty
is $50,000.00 or less, then all of the following:
(i) The taxpayer has entered into an offer of compromise with
the internal revenue service.
(ii) The amount of the compromise with the taxpayer shall be
the same percentage reduction as is the taxpayer's offer of
compromise with the internal revenue service.
(iii) The compromise is in the best interest of this state.
(b) If the amount of the delinquent tax, interest, and penalty
is more than $50,000.00, then all of the following:
(i) An amount determined by the department or attorney general
that is based on the taxpayer's specific circumstances.
(ii) The compromise is in the best interest of this state.
(3) If a compromise is made under subsection (1), the
department shall place on file a statement of all of the following:
(a) The amount of tax assessed.
(b) The amount of interest or penalty imposed on the taxpayer.
(c) The amount actually paid under the terms of the
compromise.
(4) Pursuant to the administrative procedures act of 1969,
1969 PA 306, MCL 24.201 to 24.328, the department shall adopt
guidelines for officers and employees of the department to
determine whether an offer-in-compromise to resolve a dispute under
the income tax act of 1967, 1967 PA 281, MCL 206.1 to 206.713, is
adequate and should be accepted.
(5) The state treasurer shall establish procedures for an
independent administrative review of a rejection of a proposed
offer-in-compromise under subsection (1) before the rejection is
communicated to the taxpayer.