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Bill > SF524
IA SF524
A 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 SSB 1005.)
summary
Introduced
03/05/2025
03/05/2025
In Committee
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 rules for awarding costs to taxpayers in administrative hearings or court proceedings involving tax disputes with the Department of Revenue. Currently, taxpayers must prove the department's position was not substantially justified to recover costs, but the bill changes this by shifting the burden of proof. If a taxpayer substantially prevails on the amount in controversy or the most significant issues, the department must now prove its position was substantially justified. If the department cannot do so, the taxpayer can recover reasonable costs, including court expenses, expert witness fees, study and analysis costs, and attorney or accountant fees. The bill removes the previous $25,000 cap on recoverable costs and allows for reimbursement of expenses incurred after the initial notice of assessment or refund denial. The goal appears to be providing more fair and comprehensive cost recovery for taxpayers who successfully challenge tax assessments, by making it easier for them to recoup expenses associated with defending themselves against what may be considered unjustified tax claims.
Sponsors (0)
No sponsors listed
Other Sponsors (1)
Judiciary (S)
Last Action
Committee report, approving bill. S.J. 426. (on 03/05/2025)
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=SF524 |
| BillText | https://www.legis.iowa.gov/docs/publications/LGI/91/attachments/SF524.html |
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