News and Insights

Iowa Governor Signs Tax Amnesty Act

Tax Development May 31, 2007

Iowa Governor Chet Culver signed the Iowa Tax Amnesty Act of 2007 aimed at collecting delinquent taxes owed by Iowa taxpayers. The Tax Amnesty Program (“Program”) will run from September 4, 2007 through October 31, 2007, during which time taxpayers can pay past due taxes in full and receive waiver of penalty and pay one-half of regular interest charges normally assessed and will not be subject to civil penalties or criminal prosecution. Amnesty applies to taxes that were due anytime before December 31, 2006.

Failure to participate in the Program will not result in penalty or interest assessments beyond those ordinarily assessed by the Iowa Department of Revenue (“Department”).

Amnesty is available for income tax, sales and use tax, and all other state and local taxes and fees administered by the Department. Taxpayers eligible for amnesty include those that have tax liabilities delinquent as of December 31, 2006, including tax due on returns not filed, tax liabilities owed to the Department as of December 31, 2006, or tax liabilities not reported nor established but delinquent as of December 31, 2006.

As such, amnesty is available to taxpayers currently under audit or review, or taxpayers already contacted by the Department regarding an audit, as long as the audit assessment is not finalized by September 4, 2007. Additionally, amnesty is available for a taxpayer who has signed a Voluntary Disclosure Agreement before the beginning of the amnesty period but has not settled the outstanding tax liability with the Department.

Amnesty is not available to a taxpayer who is the subject of an active criminal investigation or who is a party to a criminal proceeding that is pending in a District Court, the Court of Appeals, or the Supreme Court of Iowa if such investigation or proceeding involves nonpayment or fraud in relation to any state tax imposed by a law in Iowa.