Tax Lawyer In Michigan

A tax lawyer in Michigan has to work two separate collectors: the IRS and the Michigan Department of Treasury. Austin & Larson Tax Resolution represents Michigan taxpayers in front of both, from offices in Brighton, Saginaw, Lansing and Jackson, and by phone and secure document exchange for the rest of the state. Our team includes a Michigan-licensed tax attorney, CPAs and IRS Enrolled Agents. A first consultation costs nothing and typically runs 20 to 30 minutes: we pull your account status, tell you which clock you’re on, and tell you what your realistic options are. Call (866) 668-2953.

Here’s the part most people get wrong. The IRS and the State of Michigan are not one agency with one set of rules. They send different letters, use different forms, run different appeal deadlines, and collect under different statutes. A resolution with one does nothing for the other. We’ve watched people settle a federal balance and then get a Michigan wage levy four months later, because nobody told them the state file was still open.

Federal tax debt has an expiration date. The IRS gets 10 years from the date a tax is assessed to collect it, under IRC 6502(a)(1). That date is called the Collection Statute Expiration Date, or CSED. When it passes, the balance comes off the books. Certain events pause the clock: a pending Offer in Compromise, a Collection Due Process hearing request, bankruptcy, an installment agreement request under review, and continuous time living outside the United States for six months or more.

Michigan works differently, and this is the single most expensive thing Michigan taxpayers don’t know.

The Michigan Department of Treasury has 4 years to assess a deficiency under MCL 205.27a. That’s the assessment clock, and it’s the one most articles cite. But MCL 205.27a sets no limit on collection. The 6-year period people repeat comes from MCL 600.5813, and it governs only Treasury’s window to file a lawsuit in court. It restarts if you make a partial payment (MCL 600.5865) or sign a written acknowledgment of the debt (MCL 600.5866). If Treasury does sue and wins, the judgment gives them 10 more years, renewable.

Administrative collection is not on that clock at all. Liens, wage levies, bank levies, and refund and lottery offsets keep running. Treasury’s own collections page says it may pursue collection for “a minimum of 6 years.” Minimum, not maximum.

What that means in practice: if you owe both, the order you pay them in matters. Federal balances near their CSED are sometimes worth waiting out. Michigan balances are not, because there’s nothing to wait for. We look at both clocks in the first consultation, because getting the sequence backwards costs real money.

Same debt, two collectors, and almost nothing about the process matches. Five differences change what we do first.

How much warning you get before a levy

The IRS has to send a Final Notice of Intent to Levy and then wait 30 days. Michigan waits 10 days after demand, under MCL 205.25(1). When both agencies are moving at once, the state levy lands first. People are routinely surprised by that, and by the fact that Michigan adds a warrant fee to the balance for every levy it serves.

How much of your paycheck each one can take

Most sites will tell you Michigan takes a flat percentage of your wages. For tax debt that is wrong. MCL 205.25(3) adopts the federal exempt-amount framework at IRC 6334, the same one the IRS uses in Publication 1494. An exempt amount stays with you based on filing status and pay period, and everything above it goes to the collector. The percentage rule people quote applies to non-tax state debts. Michigan’s tax levy is also continuous, so it sits on your wages until the liability is satisfied rather than expiring after one pay run.

How long you have to fight an assessment

Federal: 30 days to request a Collection Due Process hearing after a Final Notice. Michigan: 60 days to the Michigan Tax Tribunal or 90 days to the Court of Claims, under MCL 205.22. Miss the 90 and the assessment is final and, in the statute’s words, “not reviewable in any court by mandamus, appeal, or other method of direct or collateral attack.”

Which settlement programs you can even apply to

Both run an Offer in Compromise. The federal program uses Form 656 and covers essentially any assessed federal liability. Michigan’s program uses Form 5181 and covers individual income tax, withholding tax and corporate income tax only. There is no Michigan Offer in Compromise for sales or use tax. If a firm tells you they will settle your Michigan sales tax through an offer, they are describing a program that does not exist.

What a payment plan does to your credit

This is the one that catches people every year. On a federal Simple Payment Plan there is no lien determination at all. Michigan files the lien anyway. You can be approved, current, and paying on time, and still have a Michigan state tax lien recorded at your county Register of Deeds.

First Time Abate is being replaced

Penalty relief for a first-time slip is currently requested through First Time Abate. For original returns due January 1, 2027 or later, the IRS moves to Automatic Exemption from Penalty, applied during return processing without a request (Fact Sheet FS-2026-12, July 2026). FTA remains available for eligible earlier returns. The compliance test is the same three prior years, so what you file this year determines whether the automatic relief is there when you need it.

While we’re on numbers that move: the IRS underpayment interest rate for individuals is 7% for the quarter running July 1 through September 30, 2026 (Rev. Rul. 2026-10). The failure-to-pay penalty runs 0.5% a month to a 25% cap, drops to 0.25% a month once an installment agreement is approved, and rises to 1% a month after a levy notice goes unanswered for 10 days. Filing late is the expensive one: 5% a month, and returns due after December 31, 2025 that land more than 60 days late carry a minimum penalty no matter how small the balance.

Do you serve all of Michigan?

Yes. We have offices in Brighton, Saginaw, Lansing and Jackson, and we represent taxpayers statewide. IRS representation runs on Form 2848 and Michigan representation on Form 151, both of which are filed authorizations rather than geography. Clients in the Upper Peninsula are handled the same way as clients ten minutes from the Brighton office.

Does Michigan tax debt ever expire like IRS debt does?

No, not in the same way. The IRS has 10 years from assessment to collect under IRC 6502(a)(1), after which the federal debt expires. Michigan has 4 years to assess under MCL 205.27a, but no statute that expires a collectable balance. The 6-year figure you’ll see quoted is Treasury’s window to file suit under MCL 600.5813, and a partial payment restarts it. Liens, levies and refund offsets continue regardless.

How long do I have to fight a Michigan assessment?

Sixty days from a Notice of Intent to Assess to request an informal conference with Treasury’s Hearings Division (MCL 205.21(2), Form 5713). Once a Final Assessment issues, 60 days to appeal to the Michigan Tax Tribunal or 90 days to the Court of Claims (MCL 205.22). Miss 90 days and the assessment becomes final and is not reviewable in any court.

The IRS accepted my Offer in Compromise. Does Michigan have to accept one too?

No. A federal acceptance gets you Form 5181F, which is a specific ground for a Michigan offer, but Treasury runs its own review. It can reach a different conclusion than the IRS did, and it can reject the offer outright if your circumstances have changed materially or if the federal facts have no bearing on the state debt.

Can Michigan really take my whole paycheck?

Not your whole paycheck. Michigan’s tax levy adopts the federal exempt-amount framework at IRC 6334 through MCL 205.25(3), the same table the IRS uses in Publication 1494, so an exempt amount stays with you based on filing status and pay period and the rest goes to Treasury. Ignore any site that quotes a flat percentage for Michigan tax debt. That percentage rule applies to non-tax state debts, not this.

Why does Treasury keep calling from a company I’ve never heard of?

Michigan Treasury contracts collection work to outside agencies. GC Services LP is one that michigan.gov names on its own site. It’s not automatically a scam, but do not give account information to an inbound caller. Call Treasury’s Collection Services Bureau directly, or let us take the contact.

What does the free consultation actually include?

Twenty to thirty minutes with someone who does this work, not a salesperson. We’ll ask what notices you have, what years are unfiled, and roughly what you owe federally and to the state. You leave knowing which clock you’re on and what the realistic options are, whether or not you hire us.