Michigan: Initiation of unclaimed property audit does not toll statute of limitations (Michigan Supreme Court decision)

However, issue of whether tax authority may still file lawsuit at conclusion of audit remanded to Court of Appeals.

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April 22, 2025

The Michigan Supreme Court on March 24, 2025, held that while an unclaimed property audit constitutes a "proceeding" under the Michigan Unclaimed Property Act (UPA), the initiation of such an audit does not toll the statute of limitations under the UPA.

However, regarding the key issue of whether the tax authority must file a lawsuit within the applicable time frame to avoid the lawsuit being time-barred, the court remanded the decision back to the Court of Appeals to address whether a new, enforceable duty is created upon issuance of a final notice of determination at the conclusion of an audit that reopens the limitations period for post-examination enforcement, even if that demand includes previously unremitted amounts related to years otherwise covered by the statute of limitations.

Read an April 2025 report prepared by KPMG LLP

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