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Bill > HF773
IA HF773
IA HF773A bill for an act relating to awarding the costs in administrative hearings or court proceedings involving the collection of tax, penalties, and interest by the department of revenue.(Formerly HSB 14.)
summary
Introduced
03/05/2025
03/05/2025
In Committee
04/03/2025
04/03/2025
Crossed Over
Passed
Dead
Introduced Session
91st General Assembly
Bill Summary
This bill relates to the costs of litigation in administrative hearings or court proceedings involving the collection of tax, penalties, and interest (dispute) by the department of revenue (department). The bill changes the costs allowed to be recovered in the dispute. The costs allowed to be recovered under the bill include reasonable court costs; reasonable prevailing market rates for expert witnesses, studies, tests, analysis, or special projects; and reasonable attorney or accountant fees including fees related to the recovery of costs allowed under the bill. The bill strikes the current $25,000 cap recoverable by a taxpayer in a dispute. Under the bill, if the taxpayer substantially prevails in the dispute relating to the amount in controversy or issues involved, the burden of proof shifts to the department to prove that the position of the department was substantially justified. If the department proves the position of the department was substantially justified, the bill prohibits the taxpayer from recovering an award in the dispute. If the taxpayer prevails, the bill requires the department to pay the reasonable costs described in the bill. Under current law, the taxpayer must prove the position of the department was not substantially justified in addition to the amount in controversy and issues involved.
AI Summary
This bill modifies the provisions for awarding costs to taxpayers in administrative hearings or court proceedings involving tax collection by the Department of Revenue. The bill changes the definition of a "prevailing taxpayer" by removing the requirement that the state's position was not substantially justified. Instead, a prevailing taxpayer is now defined as someone who has substantially prevailed either in the amount in controversy or in the most significant issue(s) presented. If a taxpayer meets this standard, the burden shifts to the Department of Revenue to prove that its original position was substantially justified. If the department successfully proves its position was justified, the taxpayer will not be considered a prevailing taxpayer. The bill also expands the types of costs that can be awarded to a prevailing taxpayer, which now include reasonable court costs, market-rate fees for expert witnesses, costs for necessary studies or reports, and fees for independent attorneys or accountants. These costs must be incurred after the initial notice of assessment or denial of a refund claim. The changes aim to provide clearer guidelines for cost awards in tax-related legal proceedings.
Committee Categories
Justice
Sponsors (0)
No sponsors listed
Other Sponsors (1)
Judiciary (House)
Last Action
Referred to Judiciary. H.J. 896. (on 04/03/2025)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF773 |
| BillText | https://www.legis.iowa.gov/docs/publications/LGI/91/attachments/HF773.html |
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