Iowa Taxing Information
The Iowa Department of Revenue is responsible for collecting the following taxes from businesses and/or individuals.
- Cigarette tax
- Tobacco tax
- Motor fuel tax
- Individual income tax
- Withholding tax
- Corporate income tax
- Franchise tax
- Sales tax
- Consumer's tax
- Retailer's use tax
- Environmental protection charge
- Inheritance tax
- Generation skipping transfer tax
- Estate tax
Private collection agencies may be used to help collect unpaid tax debt. Prior to divulging private identity and personal information to a third party, verify their identity.
Priority One: Stopping Aggressive Enforced Collections
The Department of Revenue tries to work with taxpayers to find a manner of payment. However, the state of Iowa is authorized by code to enforce tax billings through the use of levies, lien filings, wage garnishment, offset and collection agencies.
A levy is a legal seizure of property to satisfy unpaid tax debt. It is different from a lien in that a lien is a claim used as security, while a levy may be used to physically take property to fulfill the tax debt. The state of Iowa is authorized to levy against or seize real property such as real estate, automobiles and bank accounts to collect back taxes. A levy against property will be released as soon as the debt is paid. A levy may also be released when an approved payment plan has been established or if the release will help the collection of the tax debt.
If you owe at least $1000 in liability to the Iowa Department of Revenue Central Collections Unit (CCU) you may have your professional license revoked, suspended or denied issuance or renewal. Without your license you are prohibited from practicing in relation to the license in the state of Iowa. Before your license is affected you will receive a notice of potential license sanction, giving you an opportunity to pay the tax, set up a payment plan or schedule a conference to contest the license sanction. If you have not resolved the liability, a Certificate of Noncompliance will then be sent to appropriate licensing authorities notifying them of your tax debt.
If necessary, the state of Iowa is authorized to file tax liens against your real estate and personal property, which, in most cases, will prevent you from being able to sell your property. Once filed, a tax lien is effective for 10 years and can be extended in 10-year increments until the tax is paid.
Notice of Assessment
If you owe tax to the state of Iowa you will be sent a billing notice. If you have not paid in full within 20 days you will then be receive a Notice of Assessment. The notice of Assessment allows you to respond within 60 days of the notice date. During the 80-day period, you may make your payment at anytime. After the 80-day period, your account will go to the collections department if not paid in full.
As directed by Iowa Code, the Department of Administrative Services, State Accounting Enterprise may implement the Offset Program to collect money owed to the state. Offset allows the State to intercept any payments owed to a person by state agencies, and apply them to the liability owed to the State.
Payment plans may only be established once your bill has gone to the Department of Revenue collections section. Your bill will go to the collections section if you have not paid the balance in full within 80 days of the original notice that you owe tax. You may be required to provide a financial statement and security before the state agrees to a payment plan.
If you do not pay at least 90% of the tax you owe by the due date there are four types of penalties that may be imposed by the Department of Revenue. If more than one penalty applies, the penalty with the highest percentage will be the only one charged.
- 1. Failing to file a return or deposit on time – 10%
- 2. Failing to pay the tax due on return or deposit on time – 5%
- 3. Audit deficiencies when additional tax is determined by DOR – 5%
- 4. Willingly failing to file or return deposit with intent to evade tax – 75%
You may be held personally liable for unpaid taxes, penalties and interest if you are the person responsible for filing returns and making tax payments for a business.
Power of Attorney
Tax returns and return information is required by tax code to be kept confidential. If you wish for your confidential information to be shared with a qualified representative of your designation, you must submit a valid Iowa Power of Attorney Form IA 2848.
If you have past due taxes, the Department of Revenue may garnish your wages or file an administrative wage assignment which requires your employer to deduct up to 100% of your pay.