Tax Attorney in Detroit, MI

Federal IRS representation for Detroit individuals and businesses — audits, back taxes, liens, levies, General Motors, Stellantis, and Ford UAW and salaried-employee equity work, Rocket Mortgage and Ally Financial fintech RSU disputes, Henry Ford Health and Beaumont 1099 physician engagements, FBAR for Bangladeshi, Yemeni, Lebanese, Polish, and Mexican heritage accounts, and U.S. Tax Court litigation at the Theodore Levin U.S. Courthouse on West Lafayette Boulevard. We coordinate Michigan Department of Treasury matters under Michigan Form 151 Authorized Representative Declaration, handle the Detroit 2.4% resident / 1.2% non-resident municipal income tax directly with the City of Detroit Income Tax Division, and refer Michigan Tax Tribunal litigation to locally admitted Michigan counsel under a co-counsel arrangement.

Reviewed by Parham Khorsandi, Esq. — California Bar #266658. Last reviewed: May 25, 2026.

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If you owe back taxes in Detroit, here is what shapes your 2026 case

Michigan operates a flat 4.25% personal income tax under Mich. Comp. Laws § 206.51 and a flat 6% Corporate Income Tax under MCL § 206.623 — one of the simpler state-level structures in the country. State sales tax is a flat 6% under MCL § 205.52 with no local sales-tax stacking permitted, so Detroit retail transactions carry a single 6% rate rather than the layered city-plus-county figures seen in Ohio or Texas. On top of all that, the City of Detroit imposes a 2.4% resident / 1.2% non-resident municipal income tax under Mich. Comp. Laws § 141.641 and Detroit City Code Ch. 30, administered by the City of Detroit Office of the Chief Financial Officer (Income Tax Division) at 2 Woodward Avenue, Suite 130. That municipal layer is one of the highest in the country — it sits alongside New York City, Philadelphia, Cincinnati, Cleveland, Kansas City MO, and Pittsburgh as the short list of major U.S. cities with a meaningful municipal income tax.

If you have received an IRS CP504, LT11, or Statutory Notice of Deficiency, or if the Michigan Department of Treasury has issued an Intent to Assess or Final Assessment under MCL § 205.21, the deadline to act is short. Michigan taxpayers get 60 days from the Final Assessment to petition the Michigan Tax Tribunal under MCL § 205.735a. We pull your IRS account transcripts, calculate your CSED, file Form 2848 Power of Attorney with the IRS and Michigan Form 151 Authorized Representative Declaration with the Department of Treasury, and put administrative brakes on collection while the case is built.

Federal tax representation for Detroit taxpayers

Victory Tax Lawyers, LLP is a California-Bar-admitted tax-resolution law firm based in Los Angeles. Our federal practice runs nationwide: the Internal Revenue Service accepts our Form 2848 Power of Attorney in every state, and the U.S. Tax Court — a single federal tribunal with jurisdiction over IRS deficiency cases — holds regular trial sessions in Detroit at the Theodore Levin U.S. Courthouse, 231 West Lafayette Boulevard. From our Robertson Boulevard office in Los Angeles, we represent Detroit residents and Michigan-domiciled businesses in IRS audits, collection cases, Tax Court petitions, Offers in Compromise under IRC § 7122, Installment Agreements under IRC § 6159, lien discharges under IRC § 6325, levy releases under IRC § 6343, and Trust Fund Recovery Penalty defenses under IRC § 6672.

For Michigan state tax matters — the flat 4.25% personal income tax under MCL § 206.51, the flat 6% Corporate Income Tax under MCL § 206.623, the 6% state sales tax under MCL § 205.52, withholding-tax assessments, and contested matters headed to the Michigan Tax Tribunal — we file Michigan Form 151 Authorized Representative Declaration with the Department of Treasury and handle the administrative track directly. For Detroit's 2.4% resident / 1.2% non-resident municipal income tax administered by the City of Detroit Office of the Chief Financial Officer under MCL § 141.641 and Detroit City Code Ch. 30, we file a City of Detroit Power of Attorney and respond directly to Income Tax Division notices. For formal litigation in the Michigan Tax Tribunal (MCL Ch. 205.701 et seq.) or the Michigan circuit courts, we associate with locally admitted Michigan counsel under a co-counsel arrangement. The federal portion of the engagement, which is usually the larger exposure for General Motors, Stellantis, and Ford executive equity holders, Rocket Mortgage and Ally Financial fintech executives, and Henry Ford Health and Beaumont physicians, stays with us.

Detroit sits at the center of one of the most economically distinctive metros in the country. General Motors, headquartered at the Renaissance Center on the Detroit River, anchors the Big Three auto industry alongside Stellantis North America (Chrysler, Jeep, Ram, Dodge), headquartered in Auburn Hills, and Ford Motor Company, headquartered in Dearborn eight miles west. The Big Three drive an outsized base of UAW-union W-2 cases (collective-bargaining wage structures, signing bonuses, profit-sharing under the UAW master agreement), salaried-employee RSU and ISO disputes, executive deferred-compensation files under IRC § 409A, and a significant volume of IRC § 174 research-and-development capitalization work tied to vehicle-engineering programs. Tier-1 automotive suppliers — Magna, Lear, American Axle, Aptiv, BorgWarner, Dana — add private-company and supplier-level files. Blue Cross Blue Shield of Michigan, headquartered downtown, produces health-insurance executive equity work. DTE Energy and ITC Holdings drive utility-sector RSU. Rocket Mortgage and Quicken Loans, headquartered in Dan Gilbert's downtown towers, plus Ally Financial in midtown, anchor a meaningful fintech corridor with mortgage-broker 1099 work, RSU vesting cases, and post-2008 financial-restructuring tax angles. Comerica drives regional banking RSU. Henry Ford Health, Beaumont Health, Detroit Medical Center, Karmanos Cancer Institute, and Children's Hospital of Michigan produce 1099 physician engagements, clinical-trial royalty income, and IRC § 1235 patent-sale matters. Wayne State, Michigan State (East Lansing), and the University of Michigan (Ann Arbor, 40 miles west) add academic appointments and Schedule K-1 partnership and grant income. The Tigers, Lions, Red Wings, Pistons, and Detroit City FC create athlete state-sourcing files under Michigan's 4.25% flat PIT plus the Detroit 2.4% resident / 1.2% non-resident municipal layer — an effective Michigan-and-municipal rate of 6.65% on Detroit-resident athlete wages. Detroit's demographic profile — the largest U.S. city with a Black-majority population by several measures, alongside the largest Arab-American population in the United States concentrated in Dearborn and Hamtramck, plus significant Bangladeshi, Yemeni, Polish, and Mexican communities — brings FinCEN Form 114 (FBAR) and Streamlined Filing Compliance Procedures into nearly every household-finance review where Bangladeshi, Yemeni, Lebanese, Polish, or Mexican accounts are in the mix. The 2013 Detroit municipal bankruptcy and the post-2013 Dan Gilbert Bedrock real-estate redevelopment cycle add a historical and present-day layer of complexity to property-tax, business-development, and capital-gain planning in the central business district.

Your tax rights as a Detroit taxpayer

Three parallel rights frameworks apply when you owe tax in Detroit. Federal rights come from the Internal Revenue Code and IRS Publication 1, the Taxpayer Bill of Rights. State rights come from Mich. Comp. Laws Ch. 205 (Taxes) and the Michigan Department of Treasury's published Taxpayer Bill of Rights at MCL § 205.6 through § 205.6a. Municipal rights come from the Michigan Uniform City Income Tax Ordinance at MCL § 141.501 et seq. and the Detroit City Code Ch. 30 as administered by the City of Detroit Office of the Chief Financial Officer (Income Tax Division). Knowing all three is the difference between a clean resolution and a missed 60-day Michigan Tax Tribunal petition deadline that turns into a state tax lien filed with the Wayne County Register of Deeds.

Right to representation

IRC § 7521(b)(2) and (c) give you the right to be represented by an attorney, CPA, or Enrolled Agent during any IRS examination or interview. Once Form 2848 is on file, the IRS must deal with us first, not you. Michigan mirrors this through Form 151 Authorized Representative Declaration authorized under MCL § 205.28. The City of Detroit Income Tax Division accepts a separate City of Detroit Power of Attorney for municipal income-tax matters under Detroit City Code Ch. 30.

Right to U.S. Tax Court review

IRC § 6213(a) gives you 90 days from a Statutory Notice of Deficiency to petition the U.S. Tax Court without paying the tax first. Miss the 90 days and the federal assessment becomes final. The Tax Court holds regular trial sessions in Detroit at the Theodore Levin U.S. Courthouse, 231 West Lafayette Boulevard.

Right to Michigan Tax Tribunal review

MCL § 205.735a gives you 60 days from a Final Assessment of the Department of Treasury to petition the Michigan Tax Tribunal — a dedicated state-tax tribunal seated at 611 West Ottawa Street, 4th Floor, Lansing MI 48933. The Tribunal is divided into an Entire Tribunal Division (matters above $20,000 or non-monetary disputes) and a Small Claims Division (matters at or below $20,000). Decisions are reviewable by the Michigan Court of Appeals under MCL § 205.753. Tighter than the federal 90-day Tax Court deadline — the 60-day window is jurisdictional.

Collection Due Process

IRC § 6320 (lien) and IRC § 6330 (levy) give you a 30-day window to request a CDP hearing once the IRS files a Notice of Federal Tax Lien or issues a Final Notice of Intent to Levy. A timely CDP filing halts collection and preserves judicial review in the U.S. Tax Court.

Right to settle for less than owed

Federally, IRC § 7122 authorizes Offers in Compromise based on doubt as to liability, doubt as to collectibility, or effective tax administration. Michigan operates a parallel Offer-in-Compromise program through the Department of Treasury under MCL § 205.23a, with hardship standards similar to the federal program. The City of Detroit Income Tax Division accepts municipal-tax payment-plan and hardship submissions on a case-by-case basis under Detroit City Code Ch. 30.

Right to recover fees

IRC § 7430 allows recovery of administrative and litigation costs if the IRS takes a position that is not substantially justified and the taxpayer prevails. The threshold is high, but real, especially in audit reconsideration and Innocent Spouse cases under IRC § 6015.

How Victory Tax Lawyers helps Detroit taxpayers

Offer in Compromise under IRC § 7122

We file Form 656 with Form 433-A(OIC) or 433-B(OIC), document the Reasonable Collection Potential, and negotiate doubt-as-to-collectibility offers when full collection is not feasible within the remaining CSED. For Detroit taxpayers, a federal OIC does not resolve Michigan state liability; we run a parallel Michigan compromise through the Department of Treasury under MCL § 205.23a, and we address Detroit municipal balances with the City of Detroit Income Tax Division on a separate track.

Installment Agreements under IRC § 6159

Streamlined IAs (under $50,000), partial-pay IAs under IRC § 6159(d), and full-pay agreements. We push for partial-pay structures where the IRC § 6502 ten-year CSED will extinguish the balance before payoff — an under-used resolution path for Detroit taxpayers between $50,000 and $250,000 in federal debt. Michigan runs its own state Installment Agreement program through the Department of Treasury, and the City of Detroit Income Tax Division accepts municipal payment plans directly under Detroit City Code Ch. 30.

Lien discharge, subordination, and withdrawal

When a Notice of Federal Tax Lien blocks a Detroit property sale or refinance, we file Form 14135 (discharge), Form 14134 (subordination), or Form 12277 (withdrawal). NFTLs filed with the Wayne County Register of Deeds encumber title; the IRS procedures under IRC § 6325 set the cure path. Timing must align with the closing on a Midtown, Corktown, Indian Village, Boston-Edison, Palmer Woods, Grosse Pointe, Royal Oak, Birmingham, or Ferndale transaction.

Levy release under IRC § 6343

Wage levies, bank levies, and accounts-receivable levies. We document economic hardship under IRC § 6343(a)(1)(D) and Treasury Reg. § 301.6343-1(b)(4), and where the levy is procedurally defective, we challenge it through Collection Due Process or Appeals. Michigan state tax liens follow a parallel track under MCL § 205.25 and may be recorded with the Wayne County Register of Deeds as a state tax lien against the taxpayer's real and personal property.

Audit defense and U.S. Tax Court litigation

Correspondence audits, office audits, and field examinations — including sensitive issues like General Motors, Stellantis, and Ford salaried-employee RSU and ISO disposition timing, IRC § 174 research-and-development capitalization on automotive engineering programs, Henry Ford Health and Beaumont 1099 physician sourcing, clinical-trial royalty income under IRC § 1235, cryptocurrency, foreign accounts under FinCEN Form 114 (FBAR) for Bangladeshi, Yemeni, Lebanese, Polish, and Mexican accounts, S-corporation reasonable-compensation, Rocket Mortgage and Ally Financial RSU disposition timing, and IRC § 83(b) election validation. If the audit closes unfavorably, we petition the U.S. Tax Court within the 90-day IRC § 6213(a) window. Detroit trial sessions are held at the Theodore Levin U.S. Courthouse.

Penalty abatement under IRC § 6651 and IRM 20.1.1

First-Time Abate administrative relief, reasonable-cause abatement, and statutory exceptions for failure-to-file and failure-to-pay penalties. On accuracy-related penalties under IRC § 6662, we document substantial authority or adequate disclosure to defeat the assessment. Michigan penalties under MCL § 205.24 and Detroit municipal penalties under Detroit City Code Ch. 30 follow a separate reasonable-cause analysis.

Twelve types of Detroit tax matters we handle

Federal cases for Detroit residents and businesses, framed against the Michigan Department of Treasury overlay and the Detroit 2.4% resident / 1.2% non-resident municipal income tax where it matters.

Big Three Auto RSU, ISO, and UAW payroll work

General Motors (Renaissance Center HQ), Stellantis North America (Auburn Hills HQ), and Ford Motor (Dearborn HQ) drive the metro's executive equity case mix. Salaried-employee RSU vesting under IRC § 83 produces ordinary-income W-2 inclusion at vest with a 22% supplemental-wage withholding (or 37% above $1 million in aggregate). ISO disqualifying-disposition events under IRC § 422, AMT bargain-element inclusion under IRC § 56, IRC § 409A deferred-compensation disputes, and IRC § 83(b) election timing on restricted-stock grants drive the executive case mix. On the UAW union side, collective-bargaining wage structures, signing bonuses, and profit-sharing payments under the UAW master agreement create their own W-2 and reporting issues. Add Michigan's flat 4.25% PIT and Detroit's 2.4% resident municipal income tax, and a $500,000 RSU vesting event arrives in April with six-figure shortfalls against the 37% top bracket.

IRC § 174 R&D capitalization in automotive engineering

The 2017 Tax Cuts and Jobs Act amended IRC § 174 to require capitalization and five-year amortization of domestic research-and-experimental expenditures (15-year for foreign), effective for tax years beginning after 2021. The change hit the automotive industry harder than almost any other sector. Vehicle-engineering programs at General Motors, Stellantis, and Ford — plus the tier-1 supplier base of Magna, Lear, American Axle, Aptiv, BorgWarner, and Dana — carry massive R&D budgets that now must be amortized rather than expensed. We work the § 174 capitalization analysis, the IRC § 41 research-credit interplay, and the Form 6765 documentation that the IRS examines on every large-corporate and supplier-tier audit.

Trust Fund Recovery Penalty

IRC § 6672 imposes personal liability on officers, partners, and check-signers for unpaid employment-tax withholding. Detroit restaurant, hospitality, construction, trucking, and small-manufacturing owners are the most frequent targets. The IRS uses Form 4180 interviews to identify responsible persons. Michigan pursues a parallel responsible-officer claim under MCL § 205.27a for unpaid trust funds, and the Department of Treasury may file a state tax lien with the Wayne County Register of Deeds.

Detroit 2.4% resident / 1.2% non-resident municipal income tax

Detroit imposes a 2.4% resident / 1.2% non-resident municipal income tax under Mich. Comp. Laws § 141.641 (the Uniform City Income Tax Ordinance, MCL § 141.501 et seq.) and Detroit City Code Ch. 30, administered by the City of Detroit Office of the Chief Financial Officer (Income Tax Division) at 2 Woodward Avenue, Suite 130. Detroit sits alongside New York City, Philadelphia, Cincinnati, Cleveland, Kansas City MO, and Pittsburgh as one of the few major U.S. cities with a meaningful municipal income tax. Detroit-resident taxpayers owe the 2.4% on all income; non-residents earning Detroit-sourced wages owe the 1.2% on the Detroit-sourced portion. Michigan has 24 cities with municipal income taxes — Detroit, Battle Creek, Flint, Grand Rapids, Highland Park, Jackson, Lansing, Lapeer, Muskegon, Pontiac, Port Huron, Saginaw, Springfield, Walker, and others — but Detroit's resident rate is the highest. Income Tax Division notices of assessment carry a 30-day informal protest window followed by 35 days to petition the Michigan Tax Tribunal under MCL § 205.735a; we respond on letterhead with Form 2848 layered on the federal side and a separate City of Detroit Power of Attorney.

Notice of Federal Tax Lien

NFTLs filed with the Wayne County Register of Deeds (or the Oakland, Macomb, or Washtenaw County Register of Deeds for suburban metro Detroit) encumber title and trigger CDP rights under IRC § 6320. A parallel Michigan state tax lien may be filed by the Department of Treasury under MCL § 205.25 with the Wayne County Register of Deeds, where it operates as a lien against the taxpayer's real and personal property.

IRS bank or wage levy

Bank levies on accounts held at Comerica, Huntington, Chase, Bank of America, Citizens, PNC, Ally Bank, Rocket Money, or any Michigan-chartered institution. Wage levies hit Detroit employers within days of CP90 or LT11 issuance — we move on Form 12153 CDP requests and Form 433-F hardship submissions concurrently.

Passport revocation under IRC § 7345

A seriously delinquent tax debt (over $62,000 for 2025, indexed annually) triggers State Department certification and passport hold. Detroit Metropolitan Airport serves a meaningful Arab-American, Bangladeshi, Yemeni, Polish, Lebanese, and Mexican population with regular travel to family abroad; passport revocation hits these communities hard. We file the IRC § 7345(e) action to reverse the certification.

FBAR and FATCA non-disclosure — Arab-American and South Asian accounts

FinCEN Form 114 for foreign accounts over $10,000 aggregate. Dearborn holds the largest Arab-American population in the United States, with concentrated ties to Lebanese, Yemeni, and Iraqi family banking. Hamtramck carries one of the largest Bangladeshi and Yemeni concentrations in the Midwest. Mexicantown anchors a meaningful Mexican community. Streamlined Filing Compliance Procedures are a frequent engagement; willful-failure penalties can reach the greater of $100,000 or 50% of account balances under 31 U.S.C. § 5321(a)(5). Accounts at Bank Audi, Blom Bank, Bank of Beirut, Tadhamon International Islamic Bank, Yemen Commercial Bank, Sonali Bank, BRAC Bank, PKO Bank Polski, BBVA Mexico, and Banorte are common in Streamlined Domestic and Streamlined Foreign filings.

Tigers, Lions, Red Wings, Pistons, and Detroit City FC athlete payroll

Detroit rosters cover five major-league franchises: the Tigers (MLB, Comerica Park), the Lions (NFL, Ford Field), the Red Wings (NHL, Little Caesars Arena), the Pistons (NBA, Little Caesars Arena), and Detroit City FC (USL Championship, Keyworth Stadium in Hamtramck). Athlete state-sourcing under the so-called “jock tax” allocates wage and bonus income to each state in which a game is played, requiring multi-state filing and IRC § 901 foreign-tax-credit-style analysis at the state level. Michigan applies a duty-day analysis under MCL § 206.110 for non-resident athletes playing in Detroit, and Detroit's 2.4% resident / 1.2% non-resident municipal income tax applies to visiting-team Detroit-sourced game-day income under the Uniform City Income Tax Ordinance.

Innocent Spouse Relief

IRC § 6015 relief for spouses jointly liable on a return where the other spouse's items caused the deficiency. We file Form 8857 with a clean factual record — common in divorces involving Henry Ford or Beaumont physician spouses whose 1099 income, clinical-trial royalty payments, and 83(b) election decisions the other spouse never saw, and in Big Three salaried-executive divorces where RSU and deferred-compensation timing produces surprise joint liability.

Henry Ford Health, Beaumont, and DMC 1099 physician work

Henry Ford Health (Detroit), Beaumont Health (Royal Oak and metro), Detroit Medical Center (midtown), Karmanos Cancer Institute, and Children's Hospital of Michigan generate a meaningful 1099 physician and clinical-trial royalty caseload. Staff and visiting physicians work under a mix of W-2 employment and 1099 independent-contractor arrangements; principal investigators receive royalty and milestone payments tied to medical-device and biotech patents. We work IRC § 1235 patent-sale capital-gain treatment, IRC § 162(a) ordinary-and-necessary deductions for CME, malpractice, and home-office, IRC § 199A qualified-business-income on the 1099 side, and Schedule SE self-employment-tax calculations. The federal-plus-Michigan-plus-Detroit combined effective rate on physician income at the top tier reaches 43.65% (37% federal + 4.25% Michigan + 2.4% Detroit resident).

Unfiled returns and SFR substitutes

When the IRS files a Substitute for Return under IRC § 6020(b), the assessed tax is almost always overstated. Filing the correct original return is the first move — it routinely reduces the balance. Michigan runs a parallel substitute-return process under MCL § 205.21, and the Department of Treasury uses federal return matching to issue an Intent to Assess whenever a federal SFR posts. The City of Detroit Income Tax Division also pursues unfiled Detroit municipal returns, with non-filer assessments based on W-2 wage data shared by the Michigan Department of Treasury.

Nine common causes of tax debt for Detroit taxpayers

Patterns we see repeatedly in Detroit-based engagements. None of them are unusual — all of them are resolvable.

1. Big Three RSU and ISO under-withholding

A General Motors, Stellantis, or Ford salaried-employee RSU vests; the employer withholds 22% federal supplemental, leaving a six-figure shortfall against the 37% top bracket. Add 4.25% Michigan and 2.4% Detroit resident, and a $500,000 vesting event arrives in April with $75,000 to $100,000 still owed. The CP14 lands in May, the Michigan Intent to Assess follows within 90 days, and the Detroit Income Tax Division notice arrives soon after.

2. Henry Ford or Beaumont 1099 physician under-withholding

A staff or visiting physician earns six figures on a 1099 contract with no estimated-tax payments, then discovers the next April that federal self-employment tax (15.3% under IRC § 1401) stacks on top of the 37% federal bracket, 4.25% Michigan flat rate, and 2.4% Detroit resident municipal rate. The CP14 lands in May, the Michigan Intent to Assess follows, and the City of Detroit delinquency notice arrives within months.

3. Business closure

When an LLC or S-corp closes with unpaid Form 941 payroll-tax balances, IRC § 6672 follows the responsible officer personally — well after the entity is dissolved. Michigan pursues a parallel responsible-officer claim under MCL § 205.27a for trust-fund taxes.

4. Divorce and joint-return fallout

A jointly-filed return tied to a now-former spouse's understatement leaves both parties liable until Innocent Spouse relief under IRC § 6015 is granted. Wayne, Oakland, and Macomb County divorce filings track the federal record, and unresolved RSU, ISO, or clinical-trial royalty income from a Big Three executive or Henry Ford physician spouse is a recurring driver.

5. Identity theft and fraudulent returns

A return filed in your name with refund redirected. Form 14039 opens the IRS identity-theft case; the assessment must be corrected, not just protested. The Michigan Department of Treasury runs a parallel identity-theft unit, and the City of Detroit Income Tax Division cross-checks with the Department on suspicious filings.

6. Rocket Mortgage and Ally Financial fintech RSU surprise

Rocket Mortgage / Quicken Loans (downtown Detroit, Dan Gilbert's Bedrock portfolio) and Ally Financial (midtown) anchor a meaningful fintech corridor. RSU vesting events under IRC § 83 produce ordinary-income inclusion at vest with 22% supplemental withholding. Mortgage-broker 1099 income on the Rocket production side adds Schedule C self-employment exposure. The combined Michigan-plus-Detroit-resident effective rate of 6.65% layered onto the 37% top federal bracket drives meaningful April-15 balances.

7. Late-filed or unfiled returns

Failure-to-file under IRC § 6651(a)(1) compounds at 5% per month, capped at 25%. After three years, refunds are barred under IRC § 6511. Michigan imposes a parallel late-filing penalty under MCL § 205.24. The City of Detroit Income Tax Division pursues unfiled Detroit returns separately under Detroit City Code Ch. 30.

8. Bedrock-era real-estate sale without estimated tax

A Midtown, Corktown, Indian Village, Boston-Edison, Palmer Woods, Grosse Pointe, Royal Oak, Birmingham, or Ferndale property sale generating substantial capital gain, with no Form 1040-ES payment, produces a tax bill the next April. The post-2013 Dan Gilbert Bedrock redevelopment cycle drove substantial appreciation in the central business district and Brush Park; many investors flipped through entities and discover the dealer-status risk too late. Investor flips taxed at ordinary-income rates — not capital-gain — under the dealer-status rules of IRC § 1221.

9. Michigan Use Tax on out-of-state purchases

MCL § 205.93 imposes a 6% Use Tax on goods purchased out of state and used in Michigan. The Department of Treasury enforces aggressively through vehicle-registration cross-matching and out-of-state retailer reporting; many Detroit taxpayers discover the liability years late when a boat, RV, or aircraft registration triggers the match.

Eight tax liabilities that pull in Detroit taxpayers

Federal authority alongside the Michigan statute where there is a parallel.

Failure to file federal return

IRC § 6651(a)(1) imposes 5%/month, max 25%, plus interest under IRC § 6601. The Michigan mirror is MCL § 205.24, with separate late-filing and late-payment exposure on the same balance.

Failure to file Michigan state return

MCL § 205.24 imposes a late-filing penalty separate from the federal penalty. The Michigan Department of Treasury may issue an Intent to Assess and then a Final Assessment under MCL § 205.21, triggering a 60-day informal protest window and, if the protest fails, a Final Assessment opening the 60-day Michigan Tax Tribunal petition deadline under MCL § 205.735a.

Failure to file Detroit municipal return

Detroit City Code Ch. 30 and the Uniform City Income Tax Ordinance at MCL § 141.501 et seq. require every Detroit resident and non-resident earning Detroit-sourced income to file an annual municipal return with the City of Detroit Office of the Chief Financial Officer (Income Tax Division). Failure-to-file penalties are calculated under the city code; the Income Tax Division pursues collection through judicial proceedings in the Wayne County Circuit Court.

Federal § 7122 Offer in Compromise eligibility

All federal returns must be filed (IRC § 7122(d) compliance) and the offer must reflect Reasonable Collection Potential. The non-refundable $205 application fee may be waived for low-income certified offers.

Michigan sales tax delinquency

MCL § 205.52 imposes a 6% state sales tax with no local sales-tax stacking permitted — one of the cleanest sales-tax structures in the country, with a single 6% rate everywhere in Michigan. Personal liability for responsible persons under MCL § 205.27a pierces the corporate veil for trust-fund sales tax. The Michigan Department of Treasury uses the sales-tax license revocation as an enforcement lever — pulling a restaurant's license effectively closes the business.

Trust Fund Recovery Penalty

IRC § 6672 imposes 100% personal liability on responsible persons for unpaid trust-fund employment tax. Michigan applies a similar responsible-person rule to withheld state income tax under MCL § 205.27a.

Accuracy-related penalty

IRC § 6662 imposes 20% on substantial-understatement or negligence; IRC § 6663 imposes 75% on fraud. Defense is built on substantial authority, adequate disclosure, or reasonable cause.

Michigan Corporate Income Tax (CIT)

MCL § 206.623 imposes a flat 6% Corporate Income Tax on C-corporation taxable income apportioned to Michigan, with apportionment based on a single-sales-factor formula. The CIT applies to traditional C-corporations; flow-through entities (S-corporations, partnerships, LLCs taxed as partnerships) are taxed at the owner level under the flat 4.25% PIT. Michigan also offers a Flow-Through Entity Tax election under MCL § 206.811 et seq., enacted in 2021 in response to the federal SALT cap, allowing PTEs to pay the tax at the entity level and provide the owner a deduction at the federal level.

What resolution can look like

Debt reduced

An accepted IRC § 7122 Offer in Compromise can resolve six-figure balances for cents on the dollar where Reasonable Collection Potential supports the offer. The acceptance rate sits around 33% nationally; preparation determines the outcome.

Penalties abated

First-Time Abate removes a single year of failure-to-file or failure-to-pay penalties for taxpayers with a clean three-year compliance record. Reasonable-cause abatement under IRM 20.1.1 reaches further when supported by documentation.

Lien released or withdrawn

Once a debt is paid in full, the IRS releases the Notice of Federal Tax Lien within 30 days per IRC § 6325(a). On an Installment Agreement of $25,000 or less, lien withdrawal under Form 12277 can be requested to clear title with the Wayne County Register of Deeds.

Sample tax-resolution outcomes

Anonymized client matters drawn from our $100M+ aggregate tax-relief record across 2,000+ resolved cases.

Year	Tax debt	Resolution	Final outcome
2024	$172,415	IRC § 6159 Installment Agreement	Accepted at $25/month, partial-pay
2024	$144,860	Streamlined Installment Agreement	Accepted at $25/month
2023	$133,290	Partial-Pay Installment Agreement	Accepted at $50/month
2023	$121,750	IRC § 6159 Installment Agreement	Accepted at $25/month
2022	$112,985	Partial-Pay Installment Agreement	Accepted at $50/month

Past results do not guarantee future outcomes. Each tax case is unique. Results depend on the specific facts of the matter, including the taxpayer's financial condition, compliance history, and the discretion of the Internal Revenue Service, the Michigan Department of Treasury, the City of Detroit Office of the Chief Financial Officer, the Michigan Tax Tribunal, and other adjudicating bodies.

Why Victory Tax Lawyers for a Detroit federal-tax case

Victory Tax Lawyers is California-Bar-admitted, not Michigan-Bar-admitted. That distinction matters — and it does not block our work. The U.S. Tax Court is a federal court with nationwide jurisdiction; an attorney admitted to that court may petition and try cases at any of its trial locations, including Detroit at the Theodore Levin U.S. Courthouse, 231 West Lafayette Boulevard. IRS administrative practice runs on Form 2848 Power of Attorney, which is accepted from any attorney in good standing with any state bar plus an active Centralized Authorization File number. Most of our Detroit clients never need a separately admitted Michigan attorney because the case is, at its core, federal.

For administrative work before the Michigan Department of Treasury — protests, audit responses, Intent to Assess replies, Final Assessment protests, and Payment Plan requests — we file Michigan Form 151 Authorized Representative Declaration under MCL § 205.28 and handle the matter remotely. For Detroit's 2.4% resident / 1.2% non-resident municipal income tax assessed by the City of Detroit Income Tax Division, we file a City of Detroit Power of Attorney and respond directly on letterhead. When a case must move to the Michigan Tax Tribunal (MCL Ch. 205.701 et seq.) at 611 West Ottawa Street in Lansing, or to a circuit court in Wayne, Oakland, or Macomb County, we coordinate with locally admitted Michigan counsel under a co-counsel arrangement. The federal portion of the engagement, which is usually the larger exposure for General Motors, Stellantis, and Ford executive equity holders, Rocket Mortgage and Ally Financial fintech executives, and Henry Ford Health and Beaumont physicians, stays with us.

What distinguishes our firm: a California-Bar-admitted managing attorney with active U.S. Tax Court admission, an Enrolled Agent on staff for IRS administrative work, a 5.0 / 72-review Google rating, and $100M+ in cumulative tax relief secured across 2,000+ resolved matters. No marketing claim of being a Michigan-licensed firm — we are not. A factually accurate offer of federal tax representation, available to any Detroit taxpayer, at the same standard we apply to a Los Angeles client. Our 100% remote workflow runs through a secure document portal — you never have to drive to Robertson Boulevard.

Our seven-step process for Detroit clients

Free consultation

A 30-minute call with a tax attorney to scope your matter, identify deadlines, and decide whether engagement is the right move.

Engagement letter

A written scope, fee structure, and conflict check. Flat fees for administrative resolution; hourly or hybrid for litigation.

Form 2848, Form 151, and Detroit POA

We file the federal Power of Attorney with the IRS, Michigan Form 151 with the Department of Treasury, and a City of Detroit Power of Attorney with the Income Tax Division for municipal matters.

Transcript and CSED analysis

We pull IRS account transcripts via Form 8821, calculate each year's CSED under IRC § 6502, and identify tolling events.

Strategy memo

A written summary: the resolution path (OIC, IA, CNC, audit response, CDP, Tax Court), the timeline, and the realistic outcome range.

Filing and negotiation

We file the operative document — Form 656, Form 433-A(OIC), Form 9423, Form 12153, or a Michigan Tax Tribunal petition through local counsel — and handle every IRS, Michigan Department, and City of Detroit contact.

Compliance monitoring

After resolution we monitor compliance through the OIC five-year terms or the IA term, file future returns, and prevent default.

Two collection clocks: federal CSED and Michigan's six-year statute

The IRS has ten years from the date of assessment to collect a federal tax under IRC § 6502. After the Collection Statute Expiration Date, the debt is extinguished by operation of law. The clock pauses (“tolls”) when an Offer in Compromise is pending, when a Collection Due Process petition is filed, during bankruptcy, when an installment agreement is requested, and when the taxpayer is outside the United States for six months or more.

Michigan runs a parallel state collection rule. Under MCL § 205.27a(2), the Michigan Department of Treasury must issue an assessment within four years of the return's due date (no limit for fraud or unfiled returns). Once an assessment is final and unpaid, the Department of Treasury has six years from the assessment to collect under MCL § 205.27a(3). The Department may record a state tax lien with the Wayne County Register of Deeds under MCL § 205.25, and Michigan tax liens may be renewed for additional periods. The Detroit municipal income tax, administered by the City of Detroit Office of the Chief Financial Officer under Detroit City Code Ch. 30 and the Uniform City Income Tax Ordinance at MCL § 141.501 et seq., follows a separate collection timeline and is enforced through the Wayne County Circuit Court. Many Detroit taxpayers carry a federal CSED, a Michigan state tax lien, and a City of Detroit municipal balance simultaneously — pull all three records and know all three dates before agreeing to any payment plan or amended return that could restart a clock.

Detroit tax authorities and venues

A working knowledge of the tribunals, agencies, and field offices in metro Detroit is what separates an answered Notice from a wage levy or judgment lien. Below is the working list our firm uses on every Detroit matter.

Internal Revenue Service — Detroit TAC

The federal tax authority, at irs.gov. The Detroit Taxpayer Assistance Center operates at 477 Michigan Avenue, Room 1850, Detroit MI 48226, inside the Patrick V. McNamara Federal Building. Appointments required.

U.S. Tax Court — Detroit trial sessions

The U.S. Tax Court holds regular trial sessions in Detroit at the Theodore Levin U.S. Courthouse, 231 West Lafayette Boulevard. Petitions are filed electronically through DAWSON at ustaxcourt.gov; the 90-day deadline runs from the IRS Statutory Notice of Deficiency under IRC § 6213(a).

Michigan Department of Treasury

The state tax authority, at michigan.gov/treasury. Headquartered at 430 West Allegan Street, Lansing MI 48922, with a Detroit-area field office at 19975 Victor Parkway, Livonia, for in-person taxpayer service. Administers the flat 4.25% personal income tax under MCL § 206.51, the flat 6% Corporate Income Tax under MCL § 206.623, the 6% state sales tax under MCL § 205.52, the 6% Use Tax under MCL § 205.93, and the Flow-Through Entity Tax under MCL § 206.811 et seq.

Michigan Tax Tribunal

A dedicated state-tax tribunal under MCL § 205.701 et seq. with statewide jurisdiction over Michigan Department of Treasury final assessments, property-tax disputes, and municipal income-tax appeals. Seated at 611 West Ottawa Street, 4th Floor, Lansing MI 48933. 60-day petition deadline from the Final Assessment under MCL § 205.735a. The Tribunal is divided into an Entire Tribunal Division (matters above $20,000 or non-monetary) and a Small Claims Division (matters at or below $20,000). Decisions are reviewable by the Michigan Court of Appeals under MCL § 205.753. Victory Tax Lawyers refers Michigan Tax Tribunal litigation to locally admitted Michigan counsel; we handle the federal portion and Michigan Department administrative work directly under Form 151.

Wayne County Treasurer

The county tax-collection authority for Detroit. Office at 400 Monroe Street, 5th Floor, Detroit MI 48226. Page: waynecounty.com/elected/treasurer. Administers Wayne County delinquent property-tax billing and collection, including the post-foreclosure sale of tax-reverted parcels.

Wayne County Office of the Assessor

The county-level assessment coordination authority. Office at 400 Monroe Street, 4th Floor, Detroit MI 48226. Detroit's property-tax assessment is city-administered through the City of Detroit Assessor's Office. Appeals of Detroit property-tax assessments run through the Detroit Board of Review, with further review at the Michigan Tax Tribunal under MCL Ch. 205.

City of Detroit Income Tax Division

The municipal income-tax authority at the City of Detroit Office of the Chief Financial Officer, 2 Woodward Avenue, Suite 130, Detroit MI 48226. Detroit's 2.4% resident / 1.2% non-resident municipal income tax under Mich. Comp. Laws § 141.641 and Detroit City Code Ch. 30 is collected directly by the Income Tax Division — unlike Cleveland or Cincinnati, Detroit does not use a multi-city collection cooperative. Income Tax Division notices carry a 30-day informal protest window followed by 35 days to petition the Michigan Tax Tribunal under MCL § 205.735a.

U.S. District Court — Eastern District of Michigan, Detroit Division

Refund suits filed after payment of tax and exhaustion of administrative remedies under IRC § 7422 may be brought in the U.S. District Court (E.D. Mich., Detroit Division, Theodore Levin U.S. Courthouse, 231 West Lafayette Boulevard, Detroit MI 48226) or the U.S. Court of Federal Claims in Washington, D.C.

IRS Independent Office of Appeals

The administrative-appeals body within the IRS that resolves cases without litigation. Detroit cases run through the Appeals offices serving the Great Lakes region. Filings: Form 9423 (collection appeal) and Form 12153 (CDP). Page: irs.gov/appeals.

Taxpayer Advocate Service — Detroit

An independent organization within the IRS that helps when normal channels stall. The Detroit TAS office serves taxpayers across Southeast Michigan. Page: taxpayeradvocate.irs.gov.

Speak with a tax attorney about your Detroit matter

Free consultation, attorney-client privileged, no obligation. If a Notice of Deficiency, a Final Notice of Intent to Levy, a Michigan Department Final Assessment, or a City of Detroit Income Tax Division assessment is in front of you, the deadline to respond is real and short — call today.

Call (800) 883-8301 Free Consultation

Frequently asked questions — Detroit tax

Does Michigan have a state income tax?

Yes. Michigan operates a flat 4.25% personal income tax under MCL § 206.51 — one of the simpler state-level PIT structures in the country, with no graduated brackets. Michigan also imposes a flat 6% Corporate Income Tax on C-corporations under MCL § 206.623, with apportionment based on a single-sales-factor formula. State sales tax is a flat 6% under MCL § 205.52 with no local sales-tax stacking permitted — Detroit retail transactions carry a clean 6% rather than the layered city-plus-county figures seen in many states. On top of all that, the City of Detroit imposes a 2.4% resident / 1.2% non-resident municipal income tax under MCL § 141.641 and Detroit City Code Ch. 30, collected by the City of Detroit Office of the Chief Financial Officer (Income Tax Division). Michigan has no state estate tax; estate-tax exposure for Michigan residents is federal-only.

Where is the closest U.S. Tax Court trial location to Detroit?

The U.S. Tax Court holds regular trial sessions in Detroit itself at the Theodore Levin U.S. Courthouse, 231 West Lafayette Boulevard. A taxpayer anywhere in Southeast Michigan can request the Detroit trial location when filing the Tax Court petition. Petitions are filed electronically through DAWSON at ustaxcourt.gov; the 90-day deadline from the IRS Statutory Notice of Deficiency under IRC § 6213(a) is jurisdictional — a single day late and the federal assessment becomes final.

What is the Michigan Tax Tribunal and how does it work?

The Michigan Tax Tribunal is a dedicated state-tax tribunal established under MCL § 205.701 et seq. with statewide jurisdiction over Michigan Department of Treasury final assessments, property-tax disputes, and municipal income-tax appeals after exhaustion of local remedies. It is seated at 611 West Ottawa Street, 4th Floor, Lansing MI 48933. The petition deadline is 60 days from the Final Assessment under MCL § 205.735a — tighter than the federal 90-day Tax Court deadline. The Tribunal is divided into an Entire Tribunal Division (matters above $20,000 or non-monetary disputes) and a Small Claims Division (matters at or below $20,000). Decisions are reviewable directly by the Michigan Court of Appeals under MCL § 205.753. Victory Tax Lawyers refers Michigan Tax Tribunal litigation to locally admitted Michigan counsel; we handle the federal portion and Michigan Department administrative work directly under Michigan Form 151.

What is Michigan's collection statute of limitations?

MCL § 205.27a(2) gives the Michigan Department of Treasury four years from a return's due date to issue an assessment (no limit for fraud or unfiled returns). Once an assessment is final and unpaid, the Department has six years from the assessment to collect under MCL § 205.27a(3). The Department may record a state tax lien with the Wayne County Register of Deeds under MCL § 205.25. The federal CSED under IRC § 6502 is 10 years and is not renewable — meaning Michigan tax liens, if periodically renewed, can outlive the federal collection clock. Pulling all records is the first step before agreeing to any payment plan that might restart a clock.

I work at General Motors, Stellantis, or Ford and just had a big RSU vest — what tax issues should I expect?

Four things sit on top of every Big Three salaried-executive RSU file we open. First, RSU vesting under IRC § 83 produces ordinary-income W-2 inclusion at the value of the shares on the vest date — not the sale date. The employer withholds federal supplemental wages at 22% (or 37% above $1 million in aggregate), which is well below the top marginal bracket and routinely produces a six-figure shortfall by April. Second, ISO disqualifying-disposition events under IRC § 422 and AMT bargain-element inclusion under IRC § 56 require independent tracking. Third, IRC § 83(b) election timing on restricted-stock grants must be made within 30 days of grant or the chance is lost. Fourth, Michigan's flat 4.25% PIT plus Detroit's 2.4% resident municipal income tax adds a combined 6.65% state-and-local layer on top of the federal bill. On a $500,000 RSU vesting event, the total tax can reach $217,000 to $235,000 across federal, state, FICA, and Detroit municipal — well above the 22% supplemental withholding. The CP14 lands in May, the Michigan Intent to Assess follows within 90 days.

Can I be audited by both the IRS and the Michigan Department for the same year?

Yes. The IRS and the Michigan Department of Treasury operate independently and share information through the IRS-state exchange program. A federal audit adjustment is routinely reported to Michigan under the state's federal-change reporting rule (MCL § 206.325), and vice versa. We coordinate the two audits to prevent inconsistent positions on the federal record from costing you on the Michigan return. Because Michigan maintains a flat 4.25% PIT plus the Detroit 2.4% resident / 1.2% non-resident municipal layer collected by the City of Detroit Income Tax Division, a federal adjustment now produces a predictable state and municipal follow-on calculation.

Does Michigan offer an Offer in Compromise equivalent to the federal program?

Yes. The Michigan Department of Treasury operates a state Offer in Compromise program under MCL § 205.23a, with three grounds mirroring the federal framework: doubt as to liability, doubt as to collectibility, and effective tax administration / hardship. Documentation requirements are similar to the federal Form 656 package, and the Department generally requires the federal Offer to be filed (or recently decided) before considering the state offer. We typically run a Michigan compromise in parallel with the federal Offer where both debts are real. The City of Detroit Income Tax Division, which collects the Detroit 2.4% resident / 1.2% non-resident municipal income tax, accepts payment-plan and hardship submissions on a case-by-case basis under Detroit City Code Ch. 30.

How does Detroit's municipal income tax compare to other Michigan cities and other major U.S. cities?

Detroit's 2.4% resident / 1.2% non-resident rate is the highest among Michigan's 24 municipal-income-tax cities. By comparison, Grand Rapids sits at 1.5% resident / 0.75% non-resident, Lansing at 1.0% / 0.5%, Flint at 1.0% / 0.5%, and Saginaw at 1.5% / 0.75%. Among major U.S. cities with a meaningful municipal income tax, Detroit sits alongside New York City (top marginal around 3.876% on residents), Philadelphia (3.75% resident / 3.44% non-resident), Cincinnati (1.8%), Cleveland (2.5%), Kansas City MO (1%), and Pittsburgh (3% resident / 1% non-resident). The structure is governed by Michigan's Uniform City Income Tax Ordinance at MCL § 141.501 et seq. and Detroit's local code at Detroit City Code Ch. 30. Detroit-resident taxpayers also owe municipal income tax on income earned outside the city, with a credit for taxes paid to other municipalities. The City of Detroit Income Tax Division at 2 Woodward Avenue collects Detroit's tax directly — unlike Cleveland or Cincinnati, Detroit does not use a multi-city collection cooperative.

I have a Lebanese, Yemeni, Bangladeshi, Polish, or Mexican bank account — do I have to report it?

Yes, if the aggregate value of all foreign financial accounts you own or have signature authority over exceeded $10,000 at any point during the calendar year. FinCEN Form 114 (FBAR) is due April 15 with an automatic extension to October 15. Non-willful failure to file carries up to a $10,000 civil penalty per violation; willful failure can reach the greater of $100,000 or 50% of account balances under 31 U.S.C. § 5321(a)(5). The IRS Streamlined Filing Compliance Procedures — both Domestic and Foreign — offer a path to bring accounts at Bank Audi, Blom Bank, Bank of Beirut, Tadhamon International Islamic Bank, Yemen Commercial Bank, Sonali Bank, BRAC Bank, PKO Bank Polski, BBVA Mexico, Banorte, and similar institutions into compliance with substantially reduced penalty exposure. Dearborn carries the largest Arab-American population in the United States, with concentrated Lebanese, Yemeni, and Iraqi family banking. Hamtramck holds significant Bangladeshi and Yemeni concentrations. Mexicantown anchors a meaningful Mexican community. This makes Streamlined filings a frequent engagement, particularly where inherited accounts have gone unreported for years.

Can a California-Bar-admitted attorney represent me in Detroit?

For federal IRS matters — yes. The IRS accepts Form 2848 Power of Attorney from any attorney in good standing with any state bar. The U.S. Tax Court is a single federal court with nationwide jurisdiction; an attorney admitted to that court may represent a taxpayer at any Tax Court trial location, including Detroit. For Michigan Department of Treasury administrative work, we file Michigan Form 151 Authorized Representative Declaration and handle the matter remotely. For the Detroit 2.4% resident / 1.2% non-resident municipal income tax administered by the City of Detroit Income Tax Division, we file a City of Detroit Power of Attorney. For formal litigation in the Michigan Tax Tribunal or a Michigan circuit court, we co-counsel with locally admitted Michigan attorneys. Most engagements — audit defense, OIC, IA, levy release, Tax Court — are federal and stay entirely with our firm.

What if I have unfiled returns going back several years?

The IRS Voluntary Filing Compliance policy and IRM 5.1.11.6 generally require the last six years of returns to bring a taxpayer back into compliance. Filing prior-year returns is the first step before any OIC, IA, or CNC request — IRC § 7122(d) compliance is a prerequisite for a federal Offer. Refunds claimed on returns filed more than three years after the original due date are time-barred under IRC § 6511(b)(2). Michigan follows a parallel filing-compliance posture; the Department of Treasury may issue an Intent to Assess under MCL § 205.21 when a taxpayer fails to file, and the City of Detroit Income Tax Division pursues unfiled Detroit returns separately under Detroit City Code Ch. 30.

Can the IRS or the Michigan Department levy my Detroit bank account or wages?

Yes — after a Final Notice of Intent to Levy (CP90 or LT11) and expiration of the 30-day Collection Due Process window under IRC § 6330, the IRS may levy bank accounts at Comerica, Huntington, Chase, Bank of America, Citizens, PNC, Ally Bank, or any Michigan-chartered institution and serve wage levies on Detroit employers. A timely Form 12153 CDP request halts collection while the case is reviewed by Appeals. After a CDP determination, the taxpayer has 30 days to petition the U.S. Tax Court under IRC § 6330(d)(1). The Michigan Department of Treasury, after final assessment under MCL § 205.21, may record a state tax lien with the Wayne County Register of Deeds and pursue garnishments through the Wayne County Circuit Court.

I am a Tigers, Lions, Red Wings, Pistons, or Detroit City FC player — what tax issues should I expect?

Professional athletes resident in Detroit pay federal income tax (up to 37%), Michigan flat income tax (4.25%), Detroit resident municipal income tax (2.4%), and self-employment-style FICA depending on whether the contract treats them as W-2 employees or independent contractors. Multi-state “jock tax” allocation requires filing returns in every state where games are played, with day-counts driving wage sourcing. The IRS audits athlete returns for endorsement-income sourcing, training-camp residency claims, and entity-structure questions around image-rights LLCs. Michigan applies a duty-day analysis under MCL § 206.110 for non-resident athletes playing in Detroit, and the city's 2.4% resident / 1.2% non-resident municipal income tax applies to visiting-team Detroit-sourced game-day income under the Uniform City Income Tax Ordinance. The combined Michigan-plus-Detroit-resident effective rate on top-tier athlete income reaches 6.65% on Detroit-sourced wages.

How long does a federal Offer in Compromise take to process?

An IRS Offer in Compromise typically takes six to twelve months from filing to a final decision. The IRS deems an Offer accepted if not rejected within 24 months under IRC § 7122(f). While the OIC is pending, IRC § 6331(k) bars most levies, and the CSED is tolled. Rejected offers carry a 30-day Appeals window. A well-documented Offer with a complete Form 433-A(OIC) or 433-B(OIC) financial package moves faster than one returned for incompleteness. A Michigan Offer under MCL § 205.23a typically runs four to nine months on a parallel track.

Will hiring a tax attorney stop IRS collection action immediately?

Once Form 2848 is on file, the IRS routes all communication through the attorney and stops contacting the taxpayer directly. Active levies are not automatically lifted by the POA filing alone — release requires either a financial showing under IRC § 6343, a CDP filing under IRC § 6330, or an installment-agreement / OIC submission that triggers the IRC § 6331(k) collection bar. We move on those concurrently when a levy is in place. Michigan state collection follows a similar pattern: a Form 151 routes state contact, and a pending Michigan compromise or Payment Plan request pauses enforcement. The City of Detroit Income Tax Division halts municipal collection once a payment plan or written protest is on file.

About the author

This page was written and reviewed by Parham Khorsandi, Esq., Managing Attorney of Victory Tax Lawyers, LLP. Cal Bar #266658. Admitted to practice before the United States Tax Court. Mr. Khorsandi has resolved over 2,000 federal tax matters and secured more than $100 million in tax relief for clients across all 50 states.

Page last reviewed: May 25, 2026. Editorial standard: every federal-statute citation links to law.cornell.edu (Legal Information Institute, Cornell Law School). Every Michigan statute citation references the Michigan Compiled Laws maintained by the Michigan Legislature. Every administrative authority links to its primary .gov source. Material changes to the law are reflected within 30 days of effective date.

Attorney Advertising. This page is provided by Victory Tax Lawyers, LLP for general informational purposes only. Nothing on this page constitutes legal advice, creates an attorney-client relationship, or substitutes for consultation with a licensed attorney about your specific tax matter. Prior results described or referenced do not guarantee a similar outcome. Each tax case turns on its individual facts, applicable law, and the discretion of the Internal Revenue Service, the Michigan Department of Treasury, the City of Detroit Office of the Chief Financial Officer, the U.S. Tax Court, the Michigan Tax Tribunal, or other adjudicating body.

Victory Tax Lawyers, LLP is California-Bar-admitted with its principal office at 1100 S. Robertson Blvd., Los Angeles, CA 90035. The firm represents clients in federal tax matters nationwide via Form 2848 Power of Attorney and admission to the United States Tax Court. The firm is not admitted to practice in the courts of the State of Michigan; where a Michigan state-court appearance or Michigan Tax Tribunal litigation is required, the firm associates with locally admitted counsel.

IRS Circular 230 Disclosure: The discussion of U.S. federal tax issues on this page is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties imposed under the Internal Revenue Code or for promoting, marketing, or recommending to another party any tax-related matters addressed. For specific tax advice, consult independent tax counsel.

Authorities cited on this page

26 U.S.C. § 7122 — Federal Offer in Compromise
26 U.S.C. § 6159 — Installment Agreements
26 U.S.C. § 6321 — Federal Tax Lien
26 U.S.C. § 6325 — Lien Release and Discharge
26 U.S.C. § 6331 — Levy and Distraint
26 U.S.C. § 6343 — Release of Levy
26 U.S.C. § 6502 — Collection Statute Expiration
26 U.S.C. § 6213 — Tax Court Petition Window
26 U.S.C. § 6320 — CDP for Liens
26 U.S.C. § 6330 — CDP for Levies
26 U.S.C. § 6651 — Failure-to-File and Failure-to-Pay
26 U.S.C. § 6672 — Trust Fund Recovery Penalty
26 U.S.C. § 6015 — Innocent Spouse Relief
26 U.S.C. § 7345 — Passport Revocation
26 U.S.C. § 83 — Property Transferred in Connection with Performance of Services (RSU vesting)
26 U.S.C. § 422 — Incentive Stock Options
26 U.S.C. § 174 — Research and Experimental Expenditures (capitalization)
26 U.S.C. § 41 — Credit for Increasing Research Activities
26 U.S.C. § 199A — Qualified Business Income Deduction
26 U.S.C. § 56 — Alternative Minimum Tax adjustments (ISO bargain element)
26 U.S.C. § 409A — Nonqualified Deferred Compensation
26 U.S.C. § 1235 — Patent Sale Capital-Gain Treatment
31 U.S.C. § 5321 — FBAR civil penalties
MCL § 206.51 — Michigan flat 4.25% personal income tax
MCL § 206.110 — Michigan non-resident athlete duty-day allocation
MCL § 206.325 — Michigan federal-change reporting
MCL § 206.623 — Michigan flat 6% Corporate Income Tax
MCL § 206.811 et seq. — Michigan Flow-Through Entity Tax (SALT-cap workaround)
MCL § 205.21 — Michigan Intent to Assess and Final Assessment
MCL § 205.23a — Michigan Offer in Compromise
MCL § 205.24 — Michigan late-filing and late-payment penalty
MCL § 205.25 — Michigan state tax lien
MCL § 205.27a — Michigan assessment statute of limitations and responsible-person liability
MCL § 205.28 — Michigan Authorized Representative Declaration (Form 151)
MCL § 205.52 — Michigan state sales tax (6%)
MCL § 205.6 to 205.6a — Michigan Taxpayers' Bill of Rights
MCL § 205.701 et seq. — Michigan Tax Tribunal (60-day petition window)
MCL § 205.735a — Michigan Tax Tribunal petition deadline
MCL § 205.753 — Michigan Court of Appeals review of Tax Tribunal decisions
MCL § 205.93 — Michigan Use Tax
MCL § 141.501 et seq. — Michigan Uniform City Income Tax Ordinance
MCL § 141.641 — Detroit municipal income tax authorization
Detroit City Code Ch. 30 — Detroit 2.4% resident / 1.2% non-resident municipal income tax