Attorneys Mark E. Kellogg and Paul V. McCord successfully resolved a late payment penalty for a Michigan taxpayer. The taxpayer filed its withholding returns through Michigan's Michigan Treasury Online (MTO) system. The taxpayer initiated payment on the due date, but the funds were not withdrawn from the taxpayer's account until the next business day.
Michigan's MTO is the state analog to the IRS's Electronic Federal Tax Payment System (EFTS). EFTS allows taxpayers to pay their federal taxes electronically using the Internet, or by phone using the voice response system and is available 24/7. To ensure accuracy and timely payment, taxpayers need to submit their payment instructions to EFTS by 8 p.m. Eastern time on calendar day in advance of the due date.
After resolving their client's matter, attorneys Kellogg and McCord discussed with the Department of Treasury the need in issuing guidance to Michigan taxpayers regarding the cutoff time for payment instructions through MTO. The Department agreed and guidance will be forthcoming.
In advance of such guidance from the Department, Fraser Trebilcock advises that taxpayers paying their state taxes via MTO to initiate their payment instructions by 5 p.m. on the business day in advance of the payment due date.