Richard D. Bisio wins tax case on appeal
The Michigan Tax Tribunal, Michigan’s tax court, is overwhelmed with thousands of cases and has a two to three-year backlog. One of the ways it disposes of cases without a hearing is by putting a party in default for not complying with various rules and then dismissing the case if the party does not promptly cure the violation. This happened to one of our clients, who was ordered to provide the Department of Treasury assessment numbers of the tax assessments being appealed. Our client couldn’t timely provide the numbers because it didn’t receive the assessment notices that the department claimed it mailed. The tribunal dismissed the case. On appeal, the court of appeals reversed the dismissal, holding that the tax tribunal can’t just dismiss a case for noncompliance with the rules but must consider the following factors: “(1) whether the violation was willful or accidental; (2) the party’s history of refusing to comply with previous court orders; (3) the prejudice to the opposing party; (4) whether there exists a history of deliberate delay; (5) the degree of compliance with other parts of the court’s orders; (6) attempts to cure the defect; and (7) whether a lesser sanction would better serve the interests of justice.” These are the same factors that a circuit court must consider before dismissing a case for noncompliance with rules or orders. The tribunal must now give “careful consideration” to these factors and consider all its options in deciding what sanction is proper for noncompliance with a rule or order. This published opinion is the first opinion that applies these factors to the tax tribunal and should curtail the tribunal’s practice of summary dismissals without explanation. In our case, the court of appeals held that the tax tribunal abused its discretion in dismissing the case for failure to provide the assessment numbers that our client did not have and ordered the case reinstated.
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