Bill Text: IA SSB3036 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act relating to the costs of litigation in administrative hearings or court proceedings involving the collection of tax penalties and interest by the department of revenue.
Spectrum: Committee Bill
Status: (Introduced - Dead) 2024-01-11 - Subcommittee: Garrett, Schultz, and Weiner. [SSB3036 Detail]
Download: Iowa-2023-SSB3036-Introduced.html
Senate
Study
Bill
3036
-
Introduced
SENATE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
JUDICIARY
BILL
BY
CHAIRPERSON
ZAUN)
A
BILL
FOR
An
Act
relating
to
the
costs
of
litigation
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
TLSB
5427XC
(1)
90
jm/jh
S.F.
_____
Section
1.
Section
421.60,
subsection
4,
paragraph
a,
Code
1
2024,
is
amended
by
striking
the
paragraph
and
inserting
in
2
lieu
thereof
the
following:
3
a.
(1)
A
prevailing
taxpayer
in
an
administrative
hearing
4
or
a
court
proceeding
related
to
the
determination,
collection,
5
or
refund
of
a
tax,
penalty,
or
interest
may
be
awarded
6
reasonable
litigation
costs
by
the
department
or
a
court
that
7
are
incurred
subsequent
to
the
issuance
of
the
notice
of
8
assessment
or
denial
of
claim
for
refund
in
the
proceeding,
9
based
upon
the
following:
10
(a)
Reasonable
court
costs.
11
(b)
Reasonable
prevailing
market
rates
based
upon
the
12
services
provided
including
but
not
limited
to:
13
(i)
Expert
witnesses.
14
(ii)
The
cost
of
a
study,
engineering
report,
test,
15
analysis,
or
project
that
is
found
by
the
director
of
revenue
16
or
court
to
be
necessary
for
the
preparation
of
the
case
of
the
17
taxpayer.
18
(iii)
Fees
paid
or
incurred
by
the
taxpayer
for
the
services
19
of
an
independent
attorney
or
accountant
including
fees
paid
or
20
incurred
in
obtaining
costs
under
this
subsection.
21
(2)
The
dollar
amount
of
the
award
for
reasonable
litigation
22
costs
shall
be
determined
by
the
director
of
revenue
or
the
23
court
within
its
discretion.
24
Sec.
2.
Section
421.60,
subsection
4,
paragraph
c,
Code
25
2024,
is
amended
to
read
as
follows:
26
c.
For
purposes
of
this
section
,
“prevailing
taxpayer”
means
27
a
taxpayer
who
establishes
that
the
position
of
the
state
was
28
not
substantially
justified
and
who
has
substantially
prevailed
29
with
respect
to
the
amount
in
controversy
or
has
substantially
30
prevailed
with
respect
to
the
most
significant
issue
or
set
of
31
issues
presented.
The
determination
of
whether
a
taxpayer
is
32
a
prevailing
taxpayer
is
to
be
determined
in
accordance
with
33
chapter
17A
.
If
the
taxpayer
establishes
that
the
taxpayer
34
has
substantially
prevailed
with
respect
to
the
amount
in
35
-1-
LSB
5427XC
(1)
90
jm/jh
1/
2
S.F.
_____
controversy
or
has
substantially
prevailed
with
respect
to
the
1
most
significant
issue
set
of
issues
presented,
the
burden
of
2
proof
shifts
to
the
department
of
revenue
to
prove
that
the
3
position
taken
by
the
department
was
substantially
justified.
4
If
the
department
meets
the
burden
by
proving
the
position
of
5
the
department
was
substantially
justified,
the
taxpayer
shall
6
not
be
considered
a
prevailing
taxpayer.
7
EXPLANATION
8
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
9
the
explanation’s
substance
by
the
members
of
the
general
assembly.
10
This
bill
relates
to
the
costs
of
litigation
in
11
administrative
hearings
or
court
proceedings
involving
the
12
collection
of
tax
penalties
and
interest
(dispute)
by
the
13
department
of
revenue
(department).
14
The
bill
changes
the
costs
allowed
to
be
recovered
in
the
15
dispute.
The
costs
allowed
to
be
recovered
under
the
bill
16
include
reasonable
court
costs;
reasonable
prevailing
market
17
rates
for
expert
witnesses,
studies,
tests,
analysis,
or
18
special
projects;
and
reasonable
attorney
or
accountant
fees
19
including
fees
related
to
the
recovery
of
costs
allowed
under
20
the
bill.
21
The
bill
strikes
the
current
$25,000
cap
recoverable
by
a
22
taxpayer
in
a
dispute
and
provides
that
the
dollar
amount
of
an
23
award
in
a
dispute
be
determined
within
the
discretion
of
the
24
director
of
revenue
or
court,
as
applicable.
25
Under
the
bill,
if
the
taxpayer
substantially
prevails
in
26
the
dispute
relating
to
the
amount
in
controversy
or
issues
27
involved,
the
burden
of
proof
shifts
to
the
department
to
28
prove
that
the
position
of
the
department
was
substantially
29
justified.
If
the
department
proves
the
position
of
the
30
department
was
substantially
justified,
the
bill
prohibits
31
the
taxpayer
from
recovering
an
award
in
the
dispute.
Under
32
current
law,
the
taxpayer
must
prove
the
position
of
the
33
department
was
not
substantially
justified
in
addition
to
the
34
amount
in
controversy
and
issues
involved.
35
-2-
LSB
5427XC
(1)
90
jm/jh
2/
2
