Mich. Admin. Code R. 567.9 - Examination entrance conference

Rule 9

(1) The administrator shall determine before or as part of the entrance conference whether the person is an "eligible holder," the basis for that determination, and whether the person has elected to follow the streamlined audit process. All of the following apply:

(a) If the eligible holder claims its status based on a percentage of payroll or percentage of real and tangible personal property, except inventory, owned or rented in this state, the percentage must be 20% or greater than the percentage in paragraph (i) or (ii) of this subdivision:

(i) The numerator is the aggregate Michigan payroll during the entire 4 years that follow the dormancy period and the denominator is the aggregate of all payroll during the entire 4 years that follow the dormancy period.

(ii) The numerator is the aggregate of all Michigan real and tangible personal property, except inventory, owned or rented in Michigan during the entire 4 years that follow the dormancy period and the denominator is the aggregate of all real and tangible personal property, except inventory, owned or rented everywhere during the entire 4 years that follow the dormancy period.

(b) If the eligible holder claims its status based on employment in this state of the majority of officers that direct, control, and coordinate the activities of the business, the percentage must be greater than 50% where the numerator is the aggregate number of days all officers were employed in this state during the entire 4 years that follow the dormancy period and the denominator is the aggregate number of days all officers were employed anywhere during the entire 4 years that follow the dormancy period. For purposes of this subrule, a "day" includes any part of a calendar day.

(c) An eligible holder wholly owns a subsidiary corporation in this state if it directly owns 100% of the subsidiary corporation or if it owns 100% of the subsidiary corporation through 1 or more wholly owned intermediate subsidiaries.

(2) If the person subject to examination disputes the determination that it is not an "eligible holder," the person may request a redetermination by the administrator. Within 30 business days of the determination, the person shall provide the basis for disputing the determination and may provide additional supporting information to the administrator. Within 30 business days of receipt of request for redetermination, the administrator shall determine if the person is an eligible holder and shall notify the person of the decision. If the administrator is not able to provide a response within 30 business days, the administrator will provide the requestor with the expected date for a response, not to exceed 15 business days.

(3) The auditor shall contact the person subject to examination to schedule an entrance conference within 30 days from the date of the notice provided in R 567.5. At this time, a proposed confidentiality agreement shall also be provided to the person subject to examination. If contact with the person subject to the examination is not made within 30 days, the auditor shall notify the administrator or his or her designee to explain the cause for delay.

(4) At the entrance conference, the auditor shall provide the person the following information:

(a) Identification of the states participating in the examination.

(b) A description of the components and stages of the examination.

(c) Expected duration of the examination.

(d) A description of the respective responsibilities of the person subject to examination and the auditor.

(e) Identification of the potential types of property that may be subject to examination.

(f) An initial records request.

(g) Identification of the time period that is subject to examination.

(h) The applicable dormancy periods for each property type subject to examination as well as the statutory citations that govern the dormancy period for each property type.

(i) Explanation of the principles of unclaimed property law, applicable case law, and the process of reporting property to multiple states.

(j) Explanation of the examination methods, including estimation techniques that may be used by the auditor for those periods where records are not available or are insufficient.

(k) A document that summarizes the items discussed at the examination entrance conference.

Notes

Mich. Admin. Code R. 567.9

2017 MR 5, Eff. 3/21/2017