CHALLENGE OF ASSESSMENT, DECISION OR ORDER LIMITED BY STATUTE

(Replaces Revenue Administrative Bulletin RAB 1989-35)

RAB-94-1. This bulletin describes when the time expires for a person to enter a written appeal of the issuance of a final assessment, decision, or order of the Bureau of Revenue, Department of Treasury. The amendments to the Revenue Act made by Public Act 13 of 1993 have been incorporated to update this bulletin.

A taxpayer may have a right to appeal an assessment, decision, order, or determination of the Department in the following circumstances:

1. A final determination of a tax deficiency, or
2. The denial of a claim for a refund, or
3. The recovery of taxes paid under protest, or
4. Any other decision of the Department, such as denial of tax-exempt status.

If the appeal is not made within the time required, then the assessment, decision, or order will become final and may not be challenged further by the taxpayer.

Avenues to Perfect an Appeal

1. Appeal to the Michigan Tax Tribunal
   
   MCL 205.22(1); MSA 7.657(22)(1) provides that a person who is not satisfied with an assessment, decision, or order of the Department with respect to the determination of a tax administered under the Revenue Act may appeal the contested portion of the assessment, decision, or order to the Michigan Tax Tribunal within 35 days from the date of that assessment, decision, or order. The uncontested portion of an assessment, decision or order shall be paid as a prerequisite to appeal.
   
2. Appeal to the Michigan Court of Claims
   
   Section 22(1) also provides that a person who is not satisfied with an assessment, decision, or order of the Department may appeal the contested portion of that assessment, decision, or order to the Michigan Court of Claims within 90 days from the date of that assessment, decision, or order. In an appeal to the Court of Claims, the appellant shall first pay the tax including any applicable penalties and interest under protest and claim a refund as a part of an appeal.

An appeal from the decision of the Tax Tribunal or the Court of Claims must be made to the Court of Appeals within the specified time. Further appeal to the Michigan Supreme Court, from a decision of the Court of Appeals, may be sought in accordance with the Supreme Court rules.

Departmental Review After Issuance of Assessment, Decision or Order

The Department will not review a finalized assessment, decision, or order of the Department, or issue a refund of any tax, interest, or penalty paid on an assessment, unless the taxpayer had made a timely appeal of the assessment, decision, or order to the Michigan Tax Tribunal or to the Michigan Court of Claims.

The taxpayer may attempt to resolve the tax in dispute by submitting additional information to the Department that was not made available at the time the tax was assessed. This information must be submitted within the time period for taking an appeal for the information to be considered by the Commissioner. The Commissioner will unilaterally decide whether to sustain the finalized assessment. However, if the Department and the taxpayer cannot resolve the tax in dispute and the taxpayer does not exercise the right to an appeal to the Tax Tribunal or to the Court of Claims, then the assessment decision or order is final, conclusive and not subject to further challenge to the Tax Tribunal or Court of Claims by the taxpayer [MCL 205.22(1); MSA 7.657(22)(1)]. Further, "[t]he assessment, decision, or order of the department, if not appealed in accordance with this section shall be final and shall not be reviewable in any court by mandamus, appeal, or other method of direct or collateral attack." [MCL 205.22(2); MSA 7.657(22)(2)] Therefore, if an aggrieved taxpayer does not challenge a determination in the manner and time as provided, then an attack is prohibited.

An aggrieved taxpayer may not circumvent the limitations period on challenging an assessment, decision or order of the Department by resorting to the refund procedure. Once the time to challenge an assessment has expired, a taxpayer is no longer entitled to a refund. This statutory prohibition is found in the Revenue Act [MCL 205.22(3); MSA 7.657(22)(3)] stating "[a]n assessment shall be final, conclusive, and not subject to further challenge after 90 days from the issuance of the assessment, decision, or order of the department, and a person SHALL NOT BE ENTITLED TO A REFUND of any tax, interest, or penalty paid pursuant to an assessment unless the aggrieved person has appealed the assessment in the manner provided by this section." [MCL 205.22(1); MSA 7.657(22)(1)] (Emphasis added).