Foley & Lardner LLP partner Lynn Gandhi explored the Michigan Department of Treasury’s controversial practice of applying tax offsets ahead of the expiration of taxpayer appeal rights in her Tax Notes article, “Michigan’s Elimination of Predeprivation Rights Through Premature Offsets.”
Gandhi examines how Michigan’s use of offsets can deprive taxpayers of due process rights, effectively forcing payment of alleged debts without a fair hearing. Drawing comparisons to federal standards and practices in other states, Gandhi contends that Michigan’s current approach is out of sync with statutory and constitutional protections.
“Taxpayers must remain diligent in reviewing notices and correspondence from state agencies, particularly if no tax is shown to be due. With more reliance on heavily automated systems, as well as the increasing use of artificial intelligence, it is impossible to determine what may go wrong until it does,” Gandhi concludes. “And then, litigation is often needed to preserve appeal rights.”
