Collections

No, there is no provision in Iowa Law to allow the Iowa Department of Revenue to have your state tax lien withdrawn or expunged. Credit agencies have their own guidelines on how long released state tax liens stay on a credit report.

If you made an additional tax payment last year on the failure to report this income, you were paying a billing from the Internal Revenue Service (IRS).

You should pay your tax debt in full. If a Notice of Tax lien was filed, we release the lien at the county recorder’s office approximately 60 days after your tax debt was paid in full. You can pay your tax debt in full on GovConnectIowa. Tax debts continue to accrue interest after the lien is filed, so your pay-off amount will likely be more than the recorded amount of the lien.

I am paying the tax lien in full. Can lien release be sent sooner than 60 days?

Yes, contact the Department to obtain the payoff and remittance requirements.

For information regarding a recorded tax lien release, contact the appropriate county recorder's office directly.

Yes, contact the Department to obtain the payoff and remittance requirements.

I am refinancing my mortgage. I will not receive enough money to pay off my tax lien or I will not receive any money at the loan closing. Can I request a subordination of my tax lien?

Yes, contact the Department to obtain the subordination application.  We need to receive the subordination application approximately 60 days prior to your loan closing date.

Yes, contact the Department to obtain the payoff and remittance requirements.

I am selling real estate and I will not receive enough money at the loan closing to pay my tax debt in full. Can I request a partial lien release?

Yes, contact the Department to obtain the partial lien release application.  We need to receive the partial lien release application approximately 45 days prior to your loan closing date. A partial lien release means that the Department of Revenue is releasing its lien on a specific property. Until the tax lien is paid in full, the lien remains in effect for any other personal or real property you possess. 

You must file a sales or withholding return even if you have no tax to report. If you are registered to file sales tax or withholding tax and have not filed a return, we will estimate a tax amount and bill you. This will continue until actual returns are received, or until you cancel your registration for sales or withholding tax.

Filing Frequencies and Return Due Dates
Registration change or cancellation

Submit the Penalty Waiver Request (78-629) to ask for the penalty to be removed.   

Disclaimer: The Department may only waive penalty in specific circumstances as provided in the Iowa Code. The Department may not waive penalty for reasons of convenience or financial hardship. Interest cannot be waived.

We bill penalty and interest based on the postmark date on the envelope in which the return or payment was mailed or the date we received the transmission if you paid electronically.

If there is a block on your motor vehicle plates, please call the phone number on the last collection notice that you received. If you do not have a copy of your notice, you will need to contact the Department at 866-339-7912. The hold can be released when the amount you owe is paid or a payment plan is set up.

NOTE: if you set up a payment plan online it can take up to 3 days to process before the block is removed. If you need a block removed sooner a collector or agent can remove a block immediately within the system after setting up a payment plan over the phone. 

The Iowa Department of Revenue is not a credit reporting agency. Credit agencies review liens that are filed at the county courthouse and include state tax liens in your credit history. We file a release of state tax lien at the county recorder’s office after the debt has been paid. If the state tax lien has been released, and the lien is still showing on your credit report, you may need to obtain a copy of the state tax lien release. You may need to send this state tax lien release to the credit reporting agency. Please contact the appropriate county recorder’s office or visit https://iowalandrecords.org/portal/ .

I paid my tax debt. The state tax lien shows paid on my credit report. When will this be removed from my credit report?

The Iowa Department of Revenue is not a credit reporting agency. Credit agencies have their own guidelines on how long released state tax liens stay on a credit report.

Yes. Please visit GovConnectIowa.

Setting up a payment plan (agreement) is available after the Department sends you a Balance Due Letter, or by the Notice of Assessment that starts your 60 day appeal period.  You can make a one time payment, or set up a short term payment plan by check, bank withdrawal or one time credit card payment.

If you pay by check, detach and send the coupon with your payment in the return envelope provided.  If you don’t have a coupon, include your name, address, and account number with your payment.  You can mail payments to:

Iowa Department of Revenue
PO Box 10471
Des Moines IA  50306-0471

If we do not receive payment in full, or if you do not set up a payment plan by the end of your appeal period the balance due on your account will go to our collection section.  At this point, you will not be able to renew vehicle plates, professional licenses may be sanctioned, and other forced collection actions may be taken.

Note: If you have been billed for “Return Received without Payment” or “Returned Check”, your account goes directly to the collection section.

If it has been 30 days since you mailed your check, contact your bank to be sure the check has been cashed. If the check has been cashed, then get a copy of the canceled check, front and back, and send a copy with your billing notice in the return envelope provided.

If the check was not cashed, please allow an additional 30 days for processing.

If it has been longer than 60 days and your check has not been cashed, you may want to consider putting a stop payment on the lost check and sending another to:

Iowa Department of Revenue
PO Box 10471
Des Moines IA  50306-0471

Your payment did not get applied to your account before the next statement was sent. The billing notice is automatically generated if the system still shows a balance due. It could take 2 to 4 weeks to process the payment, although most payments are processed in seven to 10 days.

If you receive additional notices after six weeks, contact the Department.

The Internal Revenue Service (IRS) has notified us that they found additional income that was not reported on the federal tax return for the year you have been billed. If the IRS made a change to their original revision, please send us a copy of the letter you received from the IRS showing what they changed.

Attach a copy of the letter to the billing notice sent to you by us and mail in the return envelope provided to Central Collections.

The Internal Revenue Service (IRS) releases the information to us two to three times per year. It takes additional time for us to process the information and review the results before a bill is issued to you.

We calculate how much sales tax you owe based on the information you supply on your sales tax return.

Check the calculations on your return. Also check that the payments claimed as deposits were made and have been cashed.

The most common errors are:

• Included sales tax collected in the amount reported as gross sales.
  • To take the sales tax out of the gross receipt figure, use the following formula:
    
    Gross Receipts divided by 1.0X(State sales tax % + plus local option) = Gross Sales

Example:

Gross Receipts $150.00 Divided by 1.07 (7% total sales tax) 
= Gross sales $140.18

Report gross sales on the sales tax return not the gross receipts.

View Iowa local option tax information for the tax requirements in your area.

Overclaimed the amount of deposits and overpayment credits on the sales tax return.

Check your records to be sure that the payments for monthly deposits have cleared your bank. If the checks have been cashed, you will need to send us copies of the canceled check front and back. Attach the copies to the billing notice and mail in the envelope provided.

For further assistance, contact the Department.

Your refund is being held for a debt that you owe with the State of Iowa. If, after the debt has been paid, there is a portion of your refund remaining, it will be sent to you. Please allow at least six weeks for us to process your refund.

If you have a payment agreement with the Iowa Department of Revenue, that does not stop us from taking your refund(s) to pay the balance due.

The federal refund is taken first to pay your debt; then the state refund is used. It could take up to six weeks to determine how much of your state refund is needed.

You will receive notification from the agency that is taking your refund.

If the refunds or your payments overpay your state debt, the balance will be returned to you. Again, please allow six weeks to process your refunds and payments.

If you have a payment agreement with the Iowa Department of Revenue, that does not stop us from taking your refund(s) to pay the balance due.

You have a debt with the Iowa Department of Revenue or other agency. For more information regarding this debt, contact the Department.

For further information concerning the payment(s) involved, contact the agency that is making payment to you

Your payment may be less because you owed an overdue debt to a public agency. If that is the case, you should have received a “Notice of Setoff” letter. Visit GovConnectIowa and select Respond to a Letter.

The law says that the Iowa Department of Revenue may withhold money to satisfy an overdue (delinquent) debt. The official term for withholding money from a payment is "setoff".

NOTE: A payment agreement does not prevent the Department of Revenue from applying payments to your outstanding balance due.

View more about the State of Iowa Setoff Program.

We calculate penalty and interest at the time the return and payment are received. The payment is applied to fees first, penalty second, interest third, and, finally, to the tax amount due. Therefore, the balance due remains in the tax column on the billing notice.

Example:

Interest continues to accrue on the balance of the tax amount due and will be added on the first day of each new month.

The billing notice is automatically printed and sent if the system still shows a balance due. It could take 4 to 6 weeks to process the information you sent.

If you receive another notice after six weeks, contact the Department.

Interest accrues on unpaid taxes from the due date of the tax return through the current date. The interest rate and how it is applied is set by law.

NOTE: If the unreported income was from wages (W-2), gambling income (W-2G) or miscellaneous income (1099misc) that had Iowa tax withheld, please send a copy of your W-2, W-2G, or 1099misc to us. We will give you credit for the Iowa withholding and revise the amount you owe.

Send copies attached to the billing notice in the return envelope provided to the Iowa Department of Revenue Central Collections.

If you need further assistance, contact the Department.

Interest is charged on tax amounts due each month from the due date of the tax return. Additional interest is added to the account balance on the first day of a new month. The notice is showing you the amount due through the end of the current month and the amount that will be due as of the first day of the next month. While additional interest may be added to the balance, it does not change the time you have to respond to the notice.

We use the postmark date on the envelope of your payment. If the payment is postmarked by the last day of the month, the account will not accrue additional interest.

If you mailed your check within the last 30 days, it is possible we have not yet processed your payment.

If it has been longer than 30 days, you should contact your bank and inquire if the check has been cashed.

• If it has been cashed, please allow an additional 30 days for us to process your payment.
• If your check has not been cashed, you may want to tell the bank to stop payment on the check and send another check. Perhaps the payment was lost in the mail.

Whenever you send a payment, be sure to include details: tax type, tax period, and any identifying number, such as sales tax permit number or Federal Identification Number.

NOTE:: Be sure to send your payment to the correct address.