Delinquent Sales Tax

At Franskoviak Tax Solutions, we understand how overwhelming delinquent sales tax debt can be. Businesses across Michigan and beyond often find themselves falling behind on sales tax payments due to cash flow issues, poor bookkeeping, or simply misunderstanding the state’s complex tax requirements. But once your account becomes delinquent, the consequences can escalate quickly—penalties, interest, audits, liens, and even business closure.

If your business owes delinquent sales tax, it's crucial to act immediately. Our team of experienced tax professionals helps you resolve your back taxes, negotiate with state taxing authorities, and protect your assets and livelihood from enforcement action.

What Is Delinquent Sales Tax?

Sales tax becomes delinquent when your business collects sales tax from customers but fails to remit it to the state within the required deadline. In Michigan, and many other states, you’re required to file returns and pay collected sales tax on a monthly, quarterly, or annual basis depending on your business volume.

Failing to submit those payments results in delinquency, and state tax agencies view this as serious. In their eyes, you're holding funds that rightfully belong to the government. Because of this, penalties are harsh, and enforcement is aggressive. Unlike income tax debts, sales tax debts are often treated as a trust fund tax, which means the government considers you personally responsible—even if your business is a corporation or LLC.

If you're behind on sales tax, the state will assess penalties and interest and may also issue a jeopardy assessment—a fast-track process to collect money without giving you time to dispute it.

What Triggers Sales Tax Problems?

Many business owners fall into sales tax trouble unintentionally. A downturn in business revenue might force you to borrow from the sales tax you collected to cover expenses. Over time, those debts pile up. Others may not realize they had a sales tax obligation at all, especially with online or out-of-state transactions. Some businesses expand quickly and don’t update their filing frequency to match their new tax responsibilities.

The result is the same—late payments, unfiled returns, and a growing debt that invites state scrutiny. In some cases, the state might even conduct a sales tax audit, which can uncover more liabilities and result in even higher assessments.

What Happens When Sales Tax Becomes Delinquent?

If you owe delinquent sales tax, the Michigan Department of Treasury or your state taxing authority will begin enforcement actions. Initially, you may receive a demand letter. If you don’t respond or fail to pay, they can take more severe measures.

One of the most common actions is to place a tax lien on your business assets. This makes it difficult to obtain credit or sell the business. They may also garnish bank accounts, seize property, or padlock your business doors. In severe cases, state agencies may pursue criminal prosecution for tax evasion or fraud, especially if they believe the collection of sales tax was willfully mishandled.

Owners, corporate officers, and partners can be held personally liable—even after the business shuts down.

How Franskoviak Tax Solutions Helps With Delinquent Sales Tax

We take immediate steps to stop state collection actions and begin the process of resolving your delinquent sales tax account. First, we contact the tax authorities on your behalf, becoming your authorized representative. This allows us to gather records, review your account, and halt aggressive collection tactics.

We then work with you to determine the true amount owed, which may be far less than the state’s estimate. Many state sales tax assessments are inflated due to missing returns or incorrect data. We help reconstruct accurate sales figures using your point-of-sale systems, bank statements, merchant account reports, and internal records. We also ensure that any available exemptions or deductions are properly documented and applied.

Once we determine the correct liability, we evaluate your eligibility for a payment arrangement, offer in compromise, or penalty abatement. Some clients may qualify for voluntary disclosure agreements, especially if they haven't yet been contacted by the state. These programs allow for reduced penalties and often waive criminal referrals.

We negotiate on your behalf with the state to reach a manageable resolution. In many cases, we’re able to keep businesses open and operational during this process while preventing further penalties or legal action.

A Real Example of a Business Saved

A restaurant owner in Detroit contacted us after receiving a notice of intent to seize assets for nearly $80,000 in delinquent sales tax. The state was ready to levy the business bank account and shut the doors. We immediately intervened, halted collections, and conducted a full sales tax audit reconstruction. After reviewing three years of transactions and correcting over-reported sales, the actual debt was reduced by more than $30,000. We then negotiated a monthly payment plan, allowing the business to stay open, keep its employees, and recover financially.

This is what we do every day at Franskoviak Tax Solutions—protect our clients from worst-case scenarios while resolving tax issues the right way.

The Danger of Ignoring Delinquent Sales Tax

Ignoring delinquent sales tax does not make the problem go away. In fact, it compounds over time. The longer the debt goes unresolved, the higher the risk of:

Business license revocation

Public tax lien postings

Forced asset sales

Bank account levies

Criminal charges

Loss of your business

Even if you shut down the business, you may still be personally liable for unpaid sales tax. State tax agencies have long memories and powerful collection tools. If you’re behind, now is the time to act.

Why Choose Franskoviak Tax Solutions?

We’ve helped countless businesses throughout Michigan and across the country resolve delinquent sales tax issues and avoid devastating consequences. With over 30 years of tax resolution experience, our team of CPAs, Enrolled Agents, and tax attorneys knows how to navigate state tax departments, challenge incorrect assessments, and negotiate favorable outcomes.

Our firm is based in Troy, Michigan, and we provide in-person and remote services depending on your location and preferences. We are direct, transparent, and focused on results.

We don’t just patch the problem—we fix it completely and ensure you stay compliant moving forward.

The Path to Sales Tax Resolution

When you contact Franskoviak Tax Solutions, the process starts with a full evaluation of your account and business structure. We determine how many returns are missing, what assessments have been made, and what enforcement actions are underway. From there, we file any unfiled returns, correct any errors, and negotiate with the state to stop collections and reduce your tax burden.

Our goal is to protect your business, minimize what you owe, and give you a path to full tax compliance without sacrificing your livelihood.

Take Control Before the State Does

If you're behind on your sales tax, don’t wait until the state locks your doors or seizes your accounts. Get expert help now.

Call Franskoviak Tax Solutions at 855-829-3499 or visit franskoviakcpa.com for a confidential consultation. We’ll guide you through every step and put your business back on solid ground—legally, financially, and confidently.

We fix delinquent sales tax problems. Let’s fix yours.

Resolve Your Back Taxes and Protect Your Business