Bill Text: IA HSB14 | 2025-2026 | 91st General Assembly | Introduced
Bill Title: 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.
Spectrum: Committee Bill
Status: (Introduced) 2025-01-28 - Committee report, recommending amendment and passage. H.J. 136. [HSB14 Detail]
Download: Iowa-2025-HSB14-Introduced.html
House
Study
Bill
14
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
JUDICIARY
BILL
BY
CHAIRPERSON
HOLT)
A
BILL
FOR
An
Act
relating
to
awarding
the
costs
in
administrative
1
hearings
or
court
proceedings
involving
the
collection
of
2
tax,
penalties,
and
interest
by
the
department
of
revenue.
3
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
4
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Section
1.
Section
421.60,
subsection
4,
paragraph
a,
Code
1
2025,
is
amended
by
striking
the
paragraph
and
inserting
in
2
lieu
thereof
the
following:
3
a.
A
prevailing
taxpayer
in
an
administrative
hearing
or
4
a
court
proceeding
related
to
the
determination,
collection,
5
or
refund
of
a
tax,
penalty,
or
interest
shall
be
awarded
6
reasonable
costs
by
the
department
or
a
court
that
are
incurred
7
subsequent
to
the
issuance
of
the
notice
of
assessment
or
8
denial
of
claim
for
refund
in
the
proceeding,
based
upon
the
9
following:
10
(1)
Reasonable
court
costs.
11
(2)
Reasonable
prevailing
market
rates
based
upon
the
12
services
provided
including
but
not
limited
to:
13
(a)
Expert
witnesses.
14
(b)
The
cost
of
a
study,
engineering
report,
test,
analysis,
15
or
project
that
is
found
by
the
director
of
revenue
or
court
to
16
be
necessary
for
the
preparation
of
the
case
of
the
taxpayer.
17
(c)
Fees
paid
or
incurred
by
the
taxpayer
for
the
services
18
of
an
independent
attorney
or
accountant
including
fees
paid
or
19
incurred
in
obtaining
costs
under
this
subsection.
20
Sec.
2.
Section
421.60,
subsection
4,
paragraph
c,
Code
21
2025,
is
amended
to
read
as
follows:
22
c.
For
purposes
of
this
section
,
“prevailing
taxpayer”
means
23
a
taxpayer
who
establishes
that
the
position
of
the
state
was
24
not
substantially
justified
and
who
has
substantially
prevailed
25
with
respect
to
the
amount
in
controversy
or
has
substantially
26
prevailed
with
respect
to
the
most
significant
issue
or
set
of
27
issues
presented.
The
determination
of
whether
a
taxpayer
is
28
a
prevailing
taxpayer
is
to
be
determined
in
accordance
with
29
chapter
17A
.
If
the
taxpayer
establishes
that
the
taxpayer
30
has
substantially
prevailed
with
respect
to
the
amount
in
31
controversy
or
has
substantially
prevailed
with
respect
to
the
32
most
significant
issue
set
of
issues
presented,
the
burden
of
33
proof
shifts
to
the
department
of
revenue
to
prove
that
the
34
position
taken
by
the
department
was
substantially
justified.
35
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If
the
department
meets
the
burden
by
proving
the
position
of
1
the
department
was
substantially
justified,
the
taxpayer
shall
2
not
be
considered
a
prevailing
taxpayer.
3
EXPLANATION
4
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
5
the
explanation’s
substance
by
the
members
of
the
general
assembly.
6
This
bill
relates
to
the
costs
of
litigation
in
7
administrative
hearings
or
court
proceedings
involving
the
8
collection
of
tax,
penalties,
and
interest
(dispute)
by
the
9
department
of
revenue
(department).
10
The
bill
changes
the
costs
allowed
to
be
recovered
in
the
11
dispute.
The
costs
allowed
to
be
recovered
under
the
bill
12
include
reasonable
court
costs;
reasonable
prevailing
market
13
rates
for
expert
witnesses,
studies,
tests,
analysis,
or
14
special
projects;
and
reasonable
attorney
or
accountant
fees
15
including
fees
related
to
the
recovery
of
costs
allowed
under
16
the
bill.
17
The
bill
strikes
the
current
$25,000
cap
recoverable
by
a
18
taxpayer
in
a
dispute.
19
Under
the
bill,
if
the
taxpayer
substantially
prevails
in
20
the
dispute
relating
to
the
amount
in
controversy
or
issues
21
involved,
the
burden
of
proof
shifts
to
the
department
to
22
prove
that
the
position
of
the
department
was
substantially
23
justified.
If
the
department
proves
the
position
of
the
24
department
was
substantially
justified,
the
bill
prohibits
25
the
taxpayer
from
recovering
an
award
in
the
dispute.
If
the
26
taxpayer
prevails,
the
bill
requires
the
department
to
pay
27
the
reasonable
costs
described
in
the
bill.
Under
current
28
law,
the
taxpayer
must
prove
the
position
of
the
department
29
was
not
substantially
justified
in
addition
to
the
amount
in
30
controversy
and
issues
involved.
31
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