State of Michigan Tax Audits
**State of Michigan tax audits** are similar to that of the IRS. They are simply targeting random businesses and people (unless otherwise reported) to find out if everyone is properly reporting their taxes. Much like an IRS audit, you have rights during your State of Michigan audit process. If you receive communication that you are being audited by the State of Michigan, it is important that you contact a tax professional as soon as you can. Representation in any audit is paramount to a successful resolution.
Will a State of Michigan Audit Trigger an IRS Audit?
This is the fear of many people when faced with an audit notice from the State of Michigan. But, you have to remember that there is a separation of powers between the State of Michigan and the Federal Government. There are some situations when discoveries in your state audit could affect what you need to report to the IRS. However, the State of Michigan does not go out of its way to share its audit list with the IRS. You have to think of them as two separate businesses: they both want to collect the debt they feel you owe, and do not want to compete for those dollars.
What Actions Can the State of Michigan Pursue Following an Audit?
Much like the IRS, the State of Michigan can pursue liens, levies, and garnishments for taxes owed. In addition, the State of Michigan can also offset any refunds or payments owed to you as payment towards your back tax debt. You may also be subject to a freeze of your assets and transfer of property. Finally, the State of Michigan can put pad locks on business doors.
With any audit process, whether it’s the IRS or State of Michigan, you need to enlist the help of a tax solutions specialist as soon as you can. Dealing with the varying government bodies is not an easy task when you are not familiar with the process and the laws. Unless you are certain that you have done everything cleanly and your life isn’t undergoing significant changes, you should not trust that the state will not find any issues with your tax returns. If you doubt the validity of your tax returns even for a second, contact us immediately for a consultation.