Doubt as to Liability Michigan Offer in Compromise
Like the IRS, the State of Michigan is now able to reduce taxes for less than the full amount. This program is call Michigan Offer in Compromise.
Doubt as to Liability
There are three types of Offer in Compromise. If you believe the taxes owed to the State of Michigan are incorrect and you would like the state to correct the taxes owed, you will want to file an Offer in Compromise – Doubt as to Liability.
If you don’t think you qualify under Doubt as to Liability, you may qualify under one of the other two types: Doubt as to Collectability or IRS approved Offer in Compromise.
What is Doubt as to Liability?
A doubt as to liability exists when there is a genuine issue of dispute as to the existence or the amount of tax owed. If the Treasury concludes, based on a review of the evidence, that you would have prevailed had your rights to appeal not expired, a doubt as to liability will exist.
If a court or the Michigan Tax Tribunal has established liability by a final decision, no doubt will exist.
The standard for review of the proof is clear and convincing evidence. This means that you must demonstrate that it is “substantially more likely than not” that you are not liable for all or for a portion of the tax liability.
Qualifying for Michigan Offer in Compromise Doubt as to Liability
In order to qualify for a Michigan Offer in Compromise, all of the following conditions must be met:
1) All of your tax returns are filed
2) All balances owed are assessed to you
3) Your opportunity to contest the tax debt in informal conference and appeals expired
4) You do not have an open bankruptcy case
In order to prepare a Michigan Offer in Compromise – Doubt as to Liability, you will need to file the following forms:
1) Michigan Department of Treasury Form 5181
2) Michigan Department of Treasury Form 5185 OIC Schedule 3 Offer in Compromise Based on Doubt as to Liability.
Amount to Offer
The amount offered needs to be more than zero.
If Your OIC Is Rejected by the State of Michigan
If your Doubt as to Liability Offer in Compromise is rejected, you will have the opportunity to request an independent administrative review by filing a written request on Form 5186 Request for Independent Administrative Review of Rejected Offer in Compromise within 30 days after receiving rejection letter.