Michigan is one of 29 states that have signed memoranda of understanding with the IRS to share enforcement information on employment tax collection matters.
The move is part of the IRS’ Questionable Employment Tax Practices initiative. The QETP attempts to identify and prosecute employment tax schemes and illegal practices.
Employers may reasonably expect that tax records provided to state agencies also would make their way to the IRS. Any discrepancies between state and federal filings may trigger audits by one or both enforcement entities.