Taxpayer Bill of Rights

The Department examines various taxpayer information in an effort to make sure that taxpayers are following Iowa’s tax laws and rules. The Department will work with you and will carefully consider all necessary information before making a decision. Procedures for tax returns, listed below, also apply if we question your failure to file a tax return. If you are selected for an Iowa tax audit, or examination, you should know how the process works and what your rights are at each stage. Our examination may result in a billing or, in some cases, a refund.

You can represent yourself in an audit or protest. If you want someone else to represent you, we will need a completed IA 2848 Iowa Department of Revenue Power of Attorney Form, 14-101 for our records. The IA 2848 form gives your permission, in writing, for another person to represent you. Representatives of business entities may need to complete a Representative Certification form. Only those individuals listed in Iowa Administrative Code rule 701—7.6 may represent a taxpayer in a contested case proceeding following the Department’s denial of a protest. For more information, see Confidentiality, Disclosure, and Authorized Representation.

If you will be making an audio recording of your interview(s) with our auditors, let us know in advance of the scheduled meeting. We will tell you in advance if we plan to record your interview(s). If you would like a copy of the recording of your interview, we will provide a digital copy or a copy on removable media free of charge.

The Department handles many examinations and questions entirely by mail. You may receive a request for more information, a request to file a return, a notice of additional tax due, or a refund. At the conclusion of the examination, we include an explanation of changes made to your return and include a notice of additional tax due, if applicable.

If you agree with the changes noted, simply make a payment using EasyPay Iowa.

If you disagree with the changes made to your return, please provide a written explanation. Include all important documents or facts you wish to have considered. If you feel the issue cannot be settled by mail, you have the right to schedule a personal interview. If the tax matter is not settled to your satisfaction, you must file a formal protest within 60 days of the date on the Notice of Assessment (or refund denial letter). You must file the protest within the 60 days, even if you continue to communicate with the auditor or examiner.

If you don’t understand the notice you received, please call us at the number listed on the notice.

If the Department wants to conduct the review through a personal interview, or if you ask for an interview, you have the right to ask that the review take place at a reasonable time and place that works for both you and the Department. We will try to work with your schedule, but the Department makes the final decision of how, when, and where the review takes place.

If you disagree with the final report, you may discuss your case further with the auditor’s supervisor. If your tax matter is not settled to your satisfaction, you must file a formal protest within 60 days of the date on the Notice of Assessment (or refund denial letter). You must file this protest within the 60 days, even if you continue to communicate with the auditor or examiner.

Field audits normally occur at the taxpayer’s place of business during regular business hours. We will hold a pre-audit conference with you during which the auditor will inform you of the types of records needed for review, audit procedures, method of conducting the audit, and possible audit issues.

When we complete the audit, a post-audit conference will give both parties the opportunity to discuss the audit listings, issues still in dispute, audit results, and protest procedures. If your tax matter is not settled to your satisfaction, you must file a formal protest within 60 days of the date on the Notice of Assessment (or refund denial letter). You must file this protest, within the 60 days, even if you continue to communicate with the auditor or examiner.

How to File a Protest

You must file a protest in writing within 60 days of the date on the Notice of Assessment (or refund denial letter). You must file this protest within the 60 days, even if you continue to communicate with the auditor or examiner. If you do not file the protest within the 60 days, you may pay the balance due, (if any) and file a timely refund claim. When a refund is denied, you must file a protest within 60 days to challenge the refund denial.

You must complete the protest according to Iowa Administrative Code rule 701—7.8. You may use the Protest - Appeal of Department Action, 76-500 form. For more information or questions about the protest process, contact the Hearings Office at idrhearings@iowa.gov or 515-242-5269.

Reinstatement

If we dismiss your protest as untimely or for failure to respond to the Department’s motion to dismiss, you may apply for reinstatement. The Department makes the decision whether or not to reinstate an untimely or dismissed protest based on whether you provide evidence that you had good cause to miss the relevant deadline. You may use the Reinstatement of Dismissed Protest, 76-504 application. For more information, or questions about the reinstatement process, contact the Hearings Office at idrhearings@iowa.gov or 515-242-5269.

You must submit your Application(s) for Reinstatement no later than 30 days from the date we dismissed the protest.

Protest Intake Process

Protests generally go through the following process. The Hearings Section reviews the documents you have submitted as part of the protest. If we find the documents to be complete and in proper format, the Hearings Section will docket them as a protest. If the documents provided are missing necessary information, you will be contacted by the Hearings Section and given 30 days to provide the missing information. If the missing information is provided, the protest will be reviewed according to the procedures described below. If the missing information is not provided, the protest will be dismissed. If the protest is dismissed, you may request reinstatement through the process described above.

Protest Review Process

The Department’s Appeals Section will review the matter to determine if a resolution can be reached without the need for a hearing. This is commonly referred to as “informal procedures.” Procedures at this stage include, but are not limited to, requests for additional information from the taxpayer, informal conferences to discuss the matter in person or over the phone, and settlements. If the matter is still not resolved, we will send you a Letter of Findings. You have 30 days to respond to the letter. If you disagree with the Letter of Findings, you may request a hearing. Failure to respond to the Letter of Findings or other requests in a timely manner may result in the dismissal of your protest.

Requests for Hearing

You do not have to go through the informal procedures described above or wait for a Letter of Findings to request a hearing. At any time after a proper protest is filed, you or the Department can waive informal proceedings and make a written request to begin a contested case hearing. If a proper protest has been pending before the Department for at least six months, you can make a written request to the Hearings Section to begin a contested case proceeding. If you do so, the Department must file an Answer within 30 days of receipt of your request. After the Department files its Answer to your protest, an Administrative Law Judge will issue a Notice of Hearing that sets the date, time, and location for the hearing.

If the Department fails to answer within the 30-day period, interest on an assessment is suspended from the time an Answer is required to be filed until the Department files an Answer If the protest involves a refund denial and the Department fails to answer within the 30-day period, interest on the refund accrues at twice the normal rate until the Answer is filed.

The Hearing

At the hearing, an Administrative Law Judge hears testimony and accepts exhibits from both you and the Department. This hearing is similar to a court of law but is more informal. It is important that all relevant information be presented because the record made at the hearing will be reviewed by the courts if your case is appealed to a higher level. You may represent yourself at the hearing or you may be represented by a person that meets the requirements of Iowa Administrative Code rule 701—7.6.

Expedited Hearing

You and the Department may agree to have your protest set for expedited proceedings. This procedure is used in cases involving small dollar amounts that have no precedential value. Both you and the Department must agree not to conduct discovery. Both you and the Department must agree not to appeal the Administrative Law Judge’s decision under the expedited hearing format.

Telephone Hearing

Both you and the Department may agree to present the contested case through a telephone hearing. The telephone hearing is usually not appropriate for complex cases or those involving numerous exhibits.

Appeal Steps

After the hearing, the Administrative Law Judge issues a proposed order. If you and the Department agree with the order, the matter is considered resolved unless the Director reviews the proposed order on his or her own motion. If either party disagrees with the order, that party may appeal to the Director of the Department for a decision. The Director may hold a hearing and will issue a final decision. If you disagree with the Director’s decision, an Appeal may be made to the District Court. (Note: You also have the option to skip the appeal to the Director and appeal directly to the District Court.) District Court decisions may be appealed to the Iowa Supreme Court.

Recovering Litigation Expenses

You may be able to recover some of your administrative and litigation costs if an Order finds that the Department’s position was substantially unjustified on most issues. You must have given the Department all the information necessary to resolve your case and you must have requested recovery of those costs in your protest.

Once you have paid your balance due in full, if you believe the tax due is incorrect, you have the right to file a claim for refund. If the Department reduces or denies your claim for refund, you have the same appeal rights as when a Notice of Assessment is issued. If your claim for refund has been pending before the Department for six months, and has not been reduced or denied, you may file a protest on your claim. A refund claim of overpaid tax must be requested within one year of the date of the payment or within three years of the due date of the tax return whichever is later.

If you are unable to pay the balance due in full, please contact the Department to discuss payment arrangements. Any of the Department’s collection authority may be used to collect on balance due accounts, including filing property liens.

Collection Activities

The Department’s collection authority includes, but is not limited to: letters, calls, offsetting payments, denying license renewal, bank levies, and wage garnishments.

Payment Plans

If you are unable to pay your balance due in full, please contact the agent identified on the correspondence received to discuss payment arrangements. The Department may require a financial statement from you before agreeing to a payment plan.

Liens

If you fail to pay your taxes, the Department may file a lien against your property. Once filed, a tax lien is effective for 10 years and can be extended in 10-year increments. After your taxes are paid, the Department will release the lien on your property.

Property Levies

The Department is authorized to levy against, or take possession of, your real estate or property (such as automobiles or bank accounts) to collect past due taxes, penalty, and interest.

The Department will release a levy against your property once your balance due is paid in full. The Department may also release the levy if:

• The release will help the Department collect the balance due.
• The Department has agreed to a payment plan with you.

Wage Garnishments

The Department may garnish your wages or file an administrative wage assignment requiring your employer to deduct up to 100 percent of your wages to pay your past due taxes.

License Sanctions

If you have an outstanding balance due, the Department may send a Certificate of Noncompliance to relevant licensing authorities notifying them of your liability. The licensing authority may take steps to suspend, revoke, deny issuance, or deny renewal of your professional, occupational, recreational, business, or industry license. Before a Certificate of Noncompliance is issued, the Department will provide you notice of the potential license sanction and give you the opportunity to schedule a conference to challenge the license sanction or to enter into an approved payment plan.

Setoffs

The Department is authorized to retain tax refunds and vendor payments issued to you by the State of Iowa to apply to your debt. View additional information on the State Offset Program.

Collection Agencies

The Department may use private collection agencies to help collect unpaid taxes.

Jeopardy Assessments

If the Department believes that collection of your tax debt could be at risk due to a delay, it can issue a jeopardy assessment and immediately proceed to collect the tax. If you receive a jeopardy assessment, follow the same procedures for protests of regular assessments. The Department may continue to collect the tax after you have filed a protest unless you post a cash bond as provided in the Department's rules.

If you are responsible for filing returns and making tax payments for a business, you may be personally liable for the unpaid tax, penalty, and interest of that business.