Detroit income tax audits

**eastsidechris** · November-25-12, 10:14 PM

I received a notice in the mail from the City of Detroit's finance department notifying me that I did not file an income tax return with them two times in the past 5 years [[I live and work in the city of Detroit--don't even get me started on having to pay property tax AND income tax in a city where I don't even get the basic services that are a given in just about any other city. But I digress.). Three issues I have with this letter:
1. First of all, the reason I didn't file a return is because the city actually owed me a scant amount of money, and I thought I would give them a break. But I'll be sure to demand my money now.
2. The much bigger issue: the assessment they've given me for the two years, which "is based on income tax information provided by the State of MI and/or the Internal Revenue Service," is actually WRONG for both years. They say that I made more money than I actually did.
3. Additionally, they also fail to state how much money my employer withheld during the year to the city of Detroit on my paychecks. So, for example, on the year where they actually owe me $4, they claim I owe them over
$3000 [[plus additional money in penalties and interest). Great record keeping, City of Detroit!

Anybody else get such a letter in the mail? The timing of this seems like a desperate money grab by the city. I hope they go after all those slumlords who don’t even pay their property taxes like they went after me.

**DetroitPlanner** · November-25-12, 10:39 PM

Nope, but not filing regardless of whether you owe or not is against the law. Better lawyer up and get an accountant.

**pkbroch** · November-26-12, 12:30 AM

You can do several things for yourself before you spend money on a lawyer.

First fill out those returns for the years missed. Include a copy of your federal return for the missed years. This IRS return shows all income. This is what the State uses to determine if the amount is correct.

Second send a copy of your W 2 from your employer which shows the actual City of Detroit Tax paid. A letter from your employer's payroll department would also be helpful.

Send amended Detroit returns along with the Federal returns, copy's of your w'2 showing Detroit Tax Paid and a cover letter.

SEND IT CERTIFIED MAIL RETURN RECEIPT REQUESTED.

This is the most important.

They are probably guesstimating your income and taxes. The City loves to do this. You should owe no more than a fine. It may take a while for them to get back to you.

However, before I retired I owned a company in Detroit which employed over 50 people. I have never dealt with a more inept, confused, and stupid taxing authority. The depth of their incompetence was a sight to behold.

Good luck and be patient.

**pkbroch** · November-26-12, 12:37 AM

Here is a link to City of Detroit resident tax forms. It is for 2011 but you could change the year. I Don't what years you are missing so the rate might be a tiny bit higher.

http://www.detroitmi.gov/Portals/0/d...0Printable.pdf

**eastsidechris** · November-26-12, 12:27 PM

Thanks for the advice. However, I know I don't need an accountant or lawyer for this. I also know from experience that when dealing with the city of Detroit, make copies of everything, certify everything, etc--basically go into it with the assumption that they will conveniently lose everything. Unfortunate, but true.

**drjeff** · November-26-12, 01:42 PM

I had the exact thing happen once after I moved from Maryland back to Michigan. I didn't bother to file MD state taxes one year because they owed me under $2. They sent me a letter a couple years later claiming I owed a few thousand. All I had to do was file the tax form for the missing year.

**Ray1936** · November-26-12, 06:02 PM

Reading all the above makes me so glad I moved to Nevada nearly three decades ago. No state income tax; no city income tax. And the real estate taxes on my home [[worth about 225 k in today's market) are all of $1,600 and change.

[[Bad side? 7.5 % sales tax and license plates are outta sight.)

**corktownyuppie** · November-26-12, 11:37 PM

Originally Posted by Ray1936

Reading all the above makes me so glad I moved to Nevada nearly three decades ago. No state income tax; no city income tax. And the real estate taxes on my home [[worth about 225 k in today's market) are all of $1,600 and change.

[[Bad side? 7.5 % sales tax and license plates are outta sight.)

Just out of curiosity...how are your water bills and electric bills...especially during summer. I've always wondered how pricing works when you're practically in the desert.

**Ray1936** · November-27-12, 12:52 PM

Originally Posted by corktownyuppie

Just out of curiosity...how are your water bills and electric bills...especially during summer. I've always wondered how pricing works when you're practically in the desert.

Water bill, which includes sewage fees, runs around $50 a month. Electric bill runs around $150 in the summer, $90 in the off-season. Our house is one-story, 1600 sq. ft., and the yard is desert landscaping with drip irrigation.