Dealing with Michigan Tax Debts (Collections)

If you have a tax debt with the Michigan Department of Treasury, you may be dealing directly with the Department (if the debt is less than six months old) or with the Michigan Account Receivables Collection System (MARCS), which is a system of multiple third-party debt collectors that are under contract with the state of Michigan.

You really only have three tools for dealing with a Michigan tax debt:

1. Currently Not Collectible Status
   If you do not have enough income to pay your reasonable living expenses, you may qualify for Currently Not Collectible status (called "CNC Status"). This is a temporary status in which the Michigan Treasury will temporarily stop collection activity. The debt will continue to accrue interest. Once the taxpayer begins receiving more income, their status will be evaluated for other collection options. 
   
    
2. Installment Agreement
   This a payment arrangement to pay your tax debt over time.  Interest continues to accrue while you make the payments, but you can negotiate a payment that you can afford.
   
    
3. Offer in Compromise
   If you have heard the commercials stating, "we will settle your taxes debts for pennies on the dollar," this is the program they are referring to. If you receive an offer in compromise from the IRS, the state of Michigan will grant you an offer in compromise for the same percentage of relief.  You can request an offer in compromise if there is a doubt that you owe the money (doubt as to liability), but the time to question the tax debt has passed.

If you have issues communicating with either the Michigan Department of Treasury or MARCS, contact us or the Michigan Taxpayer Advocate for assistance!

Communicating with Michigan Department of Treasury or MARCS

You can contact the Michigan Department of Treasury (Treasury's Contacts Site) or MARCS directly.  You do not need a Michigan Power of Attorney to talk to them on your own behalf. If you want an attorney or other representative to talk to them on your behalf, they must submit a Form 151, Michigan Power of Attorney. It takes approximately 7-10 for the Department to process this form.  

Michigan Offer in Compromise

Program to allow taxpayers to request to settle a tax debt for less than is owed.

• Michigan Offer in Compromise Program (Web site)
• Enabling Statute - MCL 205.23a
• Guidelines for Michigan's Offer in Compromise Program
• Forms and Instructions

Michigan Installment Agreement and Currently Not Collectible Status

• Installment Agreement - less than 48 months (Form 990)
• Installment Agreement - more than 48 months (Form 990 and Individual Form 3189 Collection Information Statement) 
• State of Michigan's Tax Penalty and Interest Calculator