Michigan taxpayers and CPAs frustrated by confusing state tax letters

The onslaught of confusing letters from the Michigan Department of Treasury — some possibly wrong and others correcting old mistakes — is continuing well into May even though many had expected the snafus to settle down by now, according to tax professionals.

Thousands of taxpayers hit by an earlier glitch last month suddenly saw a "Notice of Adjustment - Correction" letter dated May 19 pop up in the mail. At least, they're receiving confirmation that some letters they got earlier from the Michigan Treasury are wrong.

As I reported April 23, the Michigan Department of Treasury incorrectly sent out about 27,000 letters titled "Notice of Adjustment," which involved many taxpayers who had made estimated tax payments during 2025 and those with prior year overpayments. The state blamed the glitch on a massive update in a new IT system.

The Michigan Treasury underwent some extensive changes relating to its IT system late in 2025.

Michigan Treasury sends letters correcting incorrect notices

To date, approximately 8,700 corrected letters have been issued, according to the Michigan Treasury Department. But to reduce confusion, the state Treasury adopted a more streamlined communication format for other letters, according to Ron Leix, a Michigan Treasury spokesperson.

The remaining 18,300 taxpayers who received incorrect notices earlier are now receiving a revised correction letter, he said. These letters have already been sent.

These letters acknowledge the error, Leix said, and those with an outstanding balance will receive an accompanying page reflecting their current amount due in a letter of inquiry titled “Reminder of Tax Due.”

"Some of the letters may display dates in the past because the underlying account adjustments were completed last month," Leix told the Detroit Free Press late Wednesday morning, May 20.

"These notices were intentionally held while we confirmed accuracy across the entire population of affected taxpayers."

Leix once again attributed some of the issues at hand to major changes in the software processing system.

"We take this issue seriously, have incorporated lessons learned, and sincerely apologize for any hardship or confusion this situation may have caused," Leix said in a statement May 20 to the Detroit Free Press.

Those seeking immediate account information or correspondence history, he said, can obtain real-time information through Michigan Treasury eServices at Michigan.gov/mitreasuryeservices for details.

Questions raised about whether new notices are on track

At the same time, though, several tax preparers told me that over the past few days other taxpayers received what appear to be new erroneous letters, also dated May 19, that related to their 2025 Michigan state income taxes. Some of these letters requested more money.

But here's where things could get touchy: The Michigan Department of Treasury has stated that the new letters being sent in May are accurate, and not sent in error. Treasury is suggesting that taxpayers who disagree with a determination should follow the contact, appeal or response instructions included in the letter they just received.

Best bet: Take these letter seriously — don't toss them.

Mind you, several tax preparers I talked with this week don't exactly see eye to eye with Treasury's view here. Some say the letters they've reviewed are wrong and their clients already paid what they owed.

"Completely wrong," said Kirk Carlson, partner with Stefforia, Petik & Carlson CPAs in Ann Arbor.

Carlson started getting notified by clients over the weekend about the latest round of tax letters that showed up out of nowhere. His firm has clients who are working as college professors, scientists, doctors and other professions, as well as many people who are retired.

"I sat at my desk Monday, and I was like 'Are you kidding me?'" Carlson told the Detroit Free Press.

He said the situation reminded him of the round of bad tax notices initially mailed by the state Treasury Department in April. But the letters aren't exactly the same. Many of those earlier notices, he said, involved claims relating to estimated taxes.

Carlson shared one case where a notice dated May 6 indicated that the balance due for state income taxes was $2,209. The taxpayer sent a check for that amount earlier and, according to Carlson, that check had already been cashed before the notice was received. No interest and penalties were included in that notice.

In another case, the taxpayer received a letter dated May 19 that indicated that $308.36 was due for interest and penalty. But Carlson said that client had already paid $3,650 including penalty and interest of $602.

Adding even more to the confusion: The state sent that same client an erroneous refund check of $602 about a month ago.

The letters didn't indicate an adjustment because the state found an error or discrepancy, Carlson said.

He said the amounts being requested on the 15 or so letters sent by the state that he's seen so far are completely wrong.

"I'm not that bad of a tax preparer," Carlson joked during our phone conversation. "I would be freakin' fired."

Carlson, who prepares about 600 individual 1040s during a tax season, said he has serious doubts about how the state has framed the extent of the problem so far.

"This is a bigger issue than anyone is letting on," Carlson said.

More: Michigan Treasury sends out wrong notices, scaring some tax filers

More: Michigan Treasury sent erroneous tax refund checks to some taxpayers

More: Michigan loses revenue due to decline in auditors, insiders say

No one wants more tax woes after April 15

Naturally, taxpayers often tend to blame their tax professionals when the state government starts demanding more money when the taxpayers believe they already paid what they owed — and sometimes it's not too pretty.

It's a frustrating situation for tax professionals and taxpayers, including those who use tax software to prepare their own returns. Many taxpayers have told me this year that they've repeatedly tried to call the state Treasury Department to get answers but ended up not being able to talk with anyone.

You've got to wonder what it will take for Treasury to fix the darn potholes.

I reached out to Treasury on the morning of Monday, May 18, and received some answers from Treasury by late Wednesday morning.

Leix told me that the tax system worked as designed but processes had to be refined.

"As with any major software deployment, ongoing changes, user feedback and system refinements are key to deliver the best possible experience for taxpayers," Leix said by email May 20.

Leix acknowledged by phone that some letters that tax professionals are now reviewing may not be what they're accustomed to seeing in the past and it will take time to get used to a new system.

Leix said the new system includes an "element of change at hand — and change can be difficult. We understand that and are working with our partners to help inform and educate about processes, among other things."

"The system is in a state of continuous improvement, and enhancements will be made based on user input," Leix noted.

Bob Doyle, president and CEO of the Michigan Association of CPAs, told the Detroit Free Press late Tuesday, May 19, that again the group has been working closely with Treasury for an explanation about all the latest letters.

"Firms and clients across the state are receiving notices related to estimated payments, prior-year overpayments, payments submitted with returns, retirement and pension subtraction issues, property tax credit adjustments, Form 2210 penalties and refunds, and other inconsistencies," according to a new alert on the MICPA website.

Doyle forwarded me an update that the MICPA received from the state and would be sharing with its members.

To be frank, I have my doubts and wonder if the state's latest guidance could add to the confusion that has been brewing for more than a month.

"It has come to our attention that some Treasury letters, including some recently reissued letters, are causing concern or confusion. To the best of our knowledge, these letters were not issued in error," the state indicated in its bulletin, which was issued to professionals at 5:20 p.m. May 19.

"Taxpayers may receive a 'Reminder of Tax Due' letter and it is correct. Please urge your clients to follow the contact or instructions on the letter if they disagree with the determination," the bulletin indicates.

The state makes a variety points in that bulletin including: "There are various reasons a taxpayer may receive a 'Reminder of Tax Due' letter. For example, if upon processing the return, it was determined that the taxpayer did not make or underpaid estimated payments, or the payment was late. Penalty and interest is applied."

The bulletin also indicated that the state can send a "Refund Sent in Error" letter if a taxpayer received a check or deposit in error.

The state notes that the "most up-to-date, thorough information is available to taxpayers via Michigan Treasury eServices, and we urge taxpayers to check there for details related to their account. Many scenarios are also explained in detail at the Tax Year 2025 Solutions Tracker."

What's troubling, of course, is that it's now on the taxpayer or the tax professional to wrangle through paperwork if they believe the state is wrong in some cases.

The state has a Taxpayer Advocate but it's important to note that "The Taxpayer Advocate Office cannot assist with 2025 individual income tax returns or refunds unless the taxpayer has a verified hardship (for example, an eviction notice or utility shutoff). Proof of hardship must be included with the request."

I've been highlighting what appear to be IT-related problems in a variety of instances this tax season.

On April 23, I told readers about the erroneous 27,000 letters titled "Notice of Adjustment," which involved many taxpayers making estimated tax payments over 2025.

The erroneous letters "related to estimated payments and credit carry-forwards" and were dated between April 7 and April 28, 2026, said Leix in late April.

Leix said then that the error related only to the letters themselves. "Taxpayer prepayments are properly accounted for and reflected correctly in Michigan Treasury eServices," he said.

At that time, Leix said the Treasury had paused sending additional notices while working toward a fix.

On April 30, I wrote about another problem where the state sent out some erroneous tax refund checks to a limited group of taxpayers. The erroneous refunds appeared to be sent out to a more limited group of taxpayers, which would be a good thing. But no number was given by the state as to how many of these incorrect checks were sent out.

According to the MICPA then: "Treasury asks CPAs to advise their clients not to cash these checks, as doing so may complicate correcting any potential error."

On Thursday, April 30, Leix provided the Free Press with a statement indicating that the Michigan Department of Treasury tax processing system is working as intended.

This week, Leix noted that as of May 19, Treasury has processed more than 5.07 million individual income tax returns and issued more than $3.35 billion in refunds since the filing season opened on Jan. 26.

"This processing volume is on pace with last year’s performance," Leix said.

Why some have not seen Michigan income tax refunds yet

While I've heard from some taxpayers who filed in early February who have still not received their refund cash, Leix said each situation is different.

I wrote about those complaints in late February, as some earlier filers reported long waits and "pending review" notices. Some of those early problems were attributed to that new IT system but not all of them.

"Every tax return is different, and some require extra care or additional review, which extends processing time," Leix said on May 20.

He noted that nearly 90% of returns are processed and refunds issued within the normal four week to six week timeframe.

About 10% of returns fall into categories that require more time, he said, such as:

Missing or incorrect informationIdentity verification to protect from fraudulent activityComplex returns with multiple schedules or creditsPotential debts or court-ordered garnishments requiring refund interception could delay a return

Tax professionals spot some real headaches

While tax notices can always be confusing, tax professionals seem to be spotting far more than a few misunderstandings here and there in 2026.

"We were under the impression that the state had stopped sending these (erroneous) notices when they became aware of the issue but clearly some are still getting out," said Robert Wexler, a certified public accountant at PLW CPA PLLC in Sterling Heights.

He told me Monday, May 18, that he was spotting new troublesome letters now, which don't seem to be related to earlier letters sent in late April.

"The new round we are getting is showing they filed their returns but didn't pay the balance due shown on the return, and the state is assessing penalties and interest. These clients have indicated that they did pay the balances with the returns," Wexler said.

The notices said the clients filed state income tax returns, Wexler said, but claimed they didn't make the required payment.

Earlier, he said, the erroneous notices sent by Michigan Treasury in late April indicated that taxpayers owed penalties and interest because the state was not including 2024 overpayments and 2025 estimated payments in their calculations.

One letter sent recently stated "your 2025 Michigan Individual Income Tax Return reflected a tax due." The letter also noted "if you have already submitted your tax payment, disregard this letter."

What's concerning to Wexler and others is that some letters don't seem to follow the regular format used when the state is owed more money.

Typically, Wexler said, if additional penalties or interest are due, such as when the state's calculation varies from what was filed on the tax return, you'd be sent another type of notice.

"It would be more of a we have recalculated the balance due on your return and then it will provide details of what changed from our filing to their calculation," Wexler said.

In this case, he said, the apparently erroneous notices "give no details, just an amount due for penalty and interest."

"At least two of the notices indicated tax due with the return was not paid when there was no tax due on the return that was filed," Wexler said.

To say Wexler is frustrated might be an understatement.

"How can the Michigan Department of Treasury administrate a complex tax code but cannot hit the off switch on an error that has been known for weeks? Very scary," Wexler said.

"And every time a client gets a notice, we have to spend time explaining the issue, which costs us money that we cannot recoup. This should be work done on their end," he said.

George Smith, a CPA with Andrews Hooper Pavlik in Bloomfield Hills, Michigan, said he has clients who paid in full or paid their estimates who are receiving notices for the first time this week that they owe money when they don't.

"At least a dozen so far," said Smith, who oddly enough heard from two more clients with confusing letters from the Michigan Treasury shortly after he made that comment.

Some other clients are getting a second notice of assessment and, he said, they already paid in full.

In addition, he has other clients who received erroneous refund checks.

"The Michigan Treasury still has a major problem on their hands," Smith said.

Some Treasury letters could be a bit reassuring

Thankfully, at least some people now appear to be getting answers about some earlier erroneous letters.

DIY tax filers and some tax preparers told me earlier this week that some Michigan taxpayers started receiving a new letter to correct the earlier "Notice of Adjustment" letter that was mistakenly sent about a month or so ago.

The state indicated on its bulleting that it was sending two types of these letters:

A corrected letter that indicated updated financialsA modified letter that acknowledged the mistake but included no financials. The letter also informed them they would receive an additional “Reminder of Tax Due” letter if they still owed.

A reader sent me a letter that he received this past weekend. Here's what his letter stated:

"A recent review of your individual income tax return for the tax year ending 31-December-2025, resulted in notification to you in letter L0001620469 stating that the Michigan Department of Treasury (Treasury) had corrected the Total Refundable Credits and Payments on your return."

"Upon further review, Treasury has determined that the information provided in that letter was incorrect. Please disregard and discard letter L0001620469," according to the new letter one taxpayer received Saturday, May 16.

Taxpayers who received that letter were told that if they owed money or had a balance due, they would receive a separate "reminder of tax due letter."

I'm not sure why such letters aren't written in clear, concise language. But this is where we are.

Fortunately, many Michigan taxpayers have long put the 2026 tax season behind them. They've cashed their refund checks. Or they've paid their bills and they're focused on other worries, like dodging construction zones on major roads and highways and dealing with the high cost of filling up the tank this upcoming Memorial Day weekend.

Yet what an incredible mess remains for other Michigan taxpayers — and, yes, very troubling to hear that tax professionals say even more confusing and many times incorrect letters are once again hitting mailboxes.

Contact personal finance columnist Susan Tompor: stompor@freepress.com. Follow her on X @tompor.