AUGUST SCHUBERT (O) (2023)

The taxpayer was assessed individual income tax and interest for underpayment of 2021 income tax. The Administrative Law Judge (ALJ) affirmed the Department’s assessment of additional, unpaid tax and interest. The ALJ agreed with the Department that the taxpayer was not exempt from Iowa individual income tax. The ALJ determined that taxes withheld by an employer are approximations of what is owed, but that taxpayers may ultimately owe more than the amount withheld and the Department may assess taxpayers when such an amount remains unpaid. Iowa Code § 422.16(1)(a). The ALJ held, further, that taxes are not consumer credit transactions, and the Department is not a “debt collector” within the meaning the applicable state and federal consumer protection statutes and that the Department's efforts to collect unpaid tax owed were proper. Iowa Code § 537.7102(3) & (5); 15 U.S.C. § 1692a(5). Finally, the ALJ noted that, while taxpayers may wish to direct how the specific dollars they pay in income tax are used by the state, the budgeting process is a function of the legislature and budgets, once adopted, are publicly available. Neither party appealed the proposed decision, and it became the Department's final order pursuant to Iowa Administrative Code rule 701-7.17(8)(d).