State Admits Error, Retracts Letters Demanding Same-Sex Married Couples Pay More In Taxes

BY JAN STEVENSON

Around 130 same-sex married couples recently received threatening letters from the Michigan State Department of Treasury demanding an explanation as to why the income on their 2013 personal taxes differed from what appeared on their federal tax returns. Couples were told they risked having their bank accounts seized if they did not respond by a deadline or pay a large additional state tax. But in an about-face, on May 12 the Department of Treasury put out a statement that the letters were sent in error.

Between The Lines contacted Treasury to ask why these letters were sent out to same-sex couples who complied with the regulations imposed by the state at that time. Since the U.S. Supreme Court decision in June 2015 that legalized same-sex marriage nationwide, all couples, including same-sex couples, now can file as married both federally and with the state. This letter felt like harassment of same-sex couples by requiring them to go backwards in time to when their marriages were deemed unequal by the state.

It was explained to the state that for many couples complying with the demands of this letter, it is time intensive and expensive. Tax accountants BTL has interviewed said they have had to prepare extensive documentation to explain why the 2013 federal and state tax returns do not agree.

The statement released to Between The Lines today from the Michigan Department of Treasury Office of Communications reads:

"The Michigan Department of Treasury was recently made aware of letters being sent out erroneously. Taxpayers' state returns are reviewed to ensure consistency with federal returns. Unfortunately, when this review happened for the 2013 tax year returns, some returns were flagged as mismatched based on inconsistent Adjusted Gross Income (AGI) figures that were actually correct. This happened to approximately 130 Michigan taxpayers - most of whom were same-sex couples who were allowed to file a joint federal income tax return but were not yet able to file a joint state return. We are mailing out a second letter to inform affected taxpayers that they can disregard our first letter. If someone is in this situation and does not receive a second letter from Treasury, they should reach out to the contact identified on their first letter so this situation can be resolved. These taxpayers do not owe an additional tax and no further action is required on their part. Treasury deeply regrets this error and apologizes for any hardship our actions may have caused taxpayers," said Ron Leix, Deputy Public Information Officer.

Couples should soon receive a second letter informing them that they can ignore the first letter.


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