Question for MI preparers

[kathyc2]

I have a retired couple client in MI. Three of the last 4 years MI has held the refund asking them to send a Household Resources Questionnaire. Majority of their income is from MI exempt sources of IRA and SS, so their MI taxable income is zero, but they receive Homestead Property Tax Credit. MI didn't find any discrepancies in prior years, but they send it again this year. Is this a common practice of MI?

[mastertaxguy]

Mi treasury

1. Short answer to your question, Yes. Michigan Treasury leads the nation in harassing senior citizens or "poor folks." It is part of their conscious effort to discourage legitimate claims for the homestead property tax credit.
2. Long answer: in addition to the tax return and MI CR Forms, you might want to keep a copy of the form (Household resources Questionnaire" they sent the TP (blank)) and complete it for each following year.
3. Michigan Treasury, on their "revamped user friendly" web site has some documents which may be of help. Enter Household Resources in the search box.
4. Their web site has a tab titled property tax and upon clicking on that, you may FIND a link to homestead property tax information and another link (on that page) to "for homeowners checklist" and THEN A four page document may be of use.
5. Often when we IN OUR OFFICE see this as a reoccurring pattern with Michigan Treasury (and they all need a job too, I guess), we paper file the returns with a detailed listing of "household resources" or the form they sometimes send out.
6. ANOTHER ISSUE MAY BE IF YOUR TP'S HAVE OTHERS LIVING WITH THEM, SUCH AS NON-DEPENDENT CHILDREN OR OTHER RELATIVES, OR IF SUCH NDC OR OTHER RELATIVES ARE USING THEIR ADDRESS ON DRIVER'S LICNESES, ETC.
7. HOUSEHOLD RESOURCES UNDER CURRENT MICHIGAN LAW IS NOT THE SAME, BUT SOMEWHAT SIMILAR IN APPEARANCE, TO THE ACA DEFINITION.
8. IF TP'S DRIVER'S LICENSES SHOW NON-MICHIGAN ADDRESSES THAT MAY ALSO BE AN ISSUE.
9. WHAT MI TREASURY REALLY IS SNIFFING AROUND FOR IS HOW ARE THEY PAYING THE PROPERTY TAXES, OTHER UPKEEP (REPAIRS, ETC), UTILITIES AND THE LIKE.

[kathyc2]

Thx for reply. It just seems stupid to me to keep asking the same taxpayer for the info when their situation has not changed from the previous years when no problems were found. Prior to 2009 or so MI used to be very easy to deal with, now they are worse than IN. Ugghh.

[TAXNJ]

Thx for reply. It just seems stupid to me to keep asking the same taxpayer for the info when their situation has not changed from the previous years when no problems were found. Prior to 2009 or so MI used to be very easy to deal with, now they are worse than IN. Ugghh.

Surprised because Michigan's Governor is a CPA!!!!