HB 5876 — Taxation: administration; settlement process; modify to reflect repeal of the state real estate transfer tax act. Amends sec. 21 of 1941 PA 122 (MCL 205.21). TIE BAR WITH: HB 5880'26, HB 5874'26

HB-5876, As Passed House, May 20, 2026 HOUSE BILL NO.

to prescribe its powers and duties if an agreement to act as agent for a city to administer, collect, and ERE H01857'25 b **_HB5876_INTR_1**_HB5876_APH_1 p5fd2yfz7ye0 enforce the city income tax act on behalf of a city is entered into with any city;

ERE H01857'25 b **_HB5876_INTR_1**_HB5876_APH_1 p5fd2yfz7ye0 1 (2) In carrying out this section, the department and the taxpayer shall comply with the following procedure:

(c) If the taxpayer serves written notice upon on the ERE H01857'25 b **_HB5876_INTR_1**_HB5876_APH_1 p5fd2yfz7ye0 1 department within 60 days after the taxpayer receives a notice of intent to assess, remits the uncontested portion of the liability, and provides a statement of the contested amounts and an explanation of the dispute, the taxpayer is entitled to an informal conference on the question of liability for the assessment.

(e) After a timely request for an informal conference has been ERE H01857'25 b **_HB5876_INTR_1**_HB5876_APH_1 p5fd2yfz7ye0 1 made under subdivision (c), the taxpayer and the department may seek to settle any or all issues in dispute by submitting a written settlement offer to the other party in accordance with the following:

If the state treasurer or ERE H01857'25 b **_HB5876_INTR_1**_HB5876_APH_1 p5fd2yfz7ye0 1 the state treasurer's designee or designees determines to pursue a settlement, the department shall notify the taxpayer in writing of the department's settlement offer, to be determined by the state treasurer or the state treasurer's designee or designees.

With respect to any issues in dispute that are not included in the settlement agreement, the ERE H01857'25 b **_HB5876_INTR_1**_HB5876_APH_1 p5fd2yfz7ye0 1 informal conference process shall must proceed as provided under this section unless the taxpayer files a written notice to withdraw the request for an informal conference as provided in subdivision (d).

An assessment under this ERE H01857'25 b **_HB5876_INTR_1**_HB5876_APH_1 p5fd2yfz7ye0 1 subdivision or subdivision (f) is final and subject to appeal as provided in section 22.

(6) For audits commenced after September 30, 2014, the department must complete fieldwork and provide a written preliminary audit determination for any tax period no later than 1 ERE H01857'25 b **_HB5876_INTR_1**_HB5876_APH_1 p5fd2yfz7ye0 1 year after the period provided for in section 27a(2) without regard to the extension provided for in section 27a(3).

(9) Except as otherwise provided under in this subsection, the settlement process established under subsection (2)(e) only applies ERE H01857'25 b **_HB5876_INTR_1**_HB5876_APH_1 p5fd2yfz7ye0 1 only to taxes subject to administration under this act.

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