The Iowa Department of Revenue's Central Collections Unit (CCU) is dedicated to helping individuals and businesses resolve outstanding debt. The CCU works to collect overdue debts, including unpaid taxes, fines, and fees, while providing resources and guidance to help taxpayers understand their payment options.
Pay Delinquent Debt
There are a variety of ways to pay a delinquent debt assessment or billing notice from the Iowa Department of Revenue.
Payment methods include credit card, direct debit from a checking account, or mailing a paper check with the Department provided payment voucher. When paying by credit card, a convenience fee will be charged based on the amount of the payment. This fee will be charged to the card being used and is retained by the credit card vendor.
Visit govconnect.iowa.gov to set up a payment plan or contact the Department at 515-281-3114. Payment plans can be set up with a maximum term of 36 months, and a minimum monthly payment amount of $10.00.
List items for Collections
The CCU can request funds be seized from the debtor's financial institution to cover the collections balance due.
To stop an account levy:
Pay the Debt
To release a levy, pay the entire debt including penalties and interest. Once the debt is settled, the Department will release the levy.
Set Up a Payment Plan
If you can't pay the full amount, set up a payment plan with the Department. The Department has the authority to set the terms of the payment plan.
Once the payment plan is approved and in place, the Department may lift the levy as long as you keep up with the agreed payments and remain current on new returns due as well as any other liabilities owed to the Department.
Challenge the Levy
If you believe the levy was placed in error, you can dispute it with the Department. The notice you receive from the Department will provide instructions on how to initiate a challenge. You may need to provide supporting documentation to prove the levy shouldn’t apply.
A portion of the debtor's wages (up to 25% of wages) will be withheld directly by the debtor’s employer until the outstanding debt is satisfied.
To stop wage levy, follow these steps:
Pay the Debt
To release a wage levy, pay the entire debt including penalties and interest.
Set Up a Payment Plan
If you can’t pay the full amount, set up a payment plan with the Department. The Department has the authority to set the terms of the payment plan.
Once the payment plan is approved and in place, the Department may stop the levy as long as you keep up with the agreed payments and remain current on new returns due as well as any other liabilities owed to the Department.
Challenge the Levy
If you believe the levy is placed in error, you can dispute it with the Department. Follow the instructions on the letter sent to you to submit a challenge. The notice you receive from the Department will provide instructions on how to initiate a challenge. You may need to provide supporting documentation to prove the levy shouldn’t occur.
Request a Release
Once payment in full has been made or an approved payment plan is in place, request a release. This can be done by calling or writing to the Iowa Department of Revenue.
Liens can be placed on property. This can impact your ability to sell the property.
To remove a state tax lien, follow these steps:
Pay the Debt
To release a lien, pay the entire debt including penalties and interest.
Once the debt is settled, the Department will release the lien.
Set Up a Payment Plan
If you can't pay the full amount, set up a payment plan with the Department. The Department has the authority to set the terms of the payment plan.
Once you’ve paid the debt in full, the lien will be released.
Release of the Lien
Once full payment is received (or your payment plan is complete), the Department will file a release with the county recorder’s office. Depending on your payment method, there may be a waiting period after you provide payment before the lien is released. For certified payments, like a cashier’s check, the release can be filed once funds are applied to the outstanding balance.
Dispute the Lien
If you believe the lien was filed in error, you can dispute it with the Department. This typically involves providing evidence of why the lien should not have been placed.
Request a Lien Subordination
If you are in the process of refinancing or selling your home and need to deal with a state tax lien, you may ask the Department for a lien subordination. This does not remove the lien, but it changes the lien's position in the priority order, potentially allowing you to secure financing or proceed with a sale. The decision to do so is up to the Department and is wholly discretionary. You can ask your real estate agent or attorney for more information on the lien subordination process.
How to Check if a Lien Has Been Released:
Check with the county recorder’s office for the status of the lien
Note: The Department does not report liens to credit agencies.
The Department may deny your application for a sales tax permit if you have outstanding tax liabilities or other debts due. To ensure your application is not denied for unpaid tax, be sure to pay your outstanding debt.
The Department may also revoke an active sales tax permit for failure to remit tax collected from taxable sales or for other violations of Iowa’s sales tax laws. Once revoked, a business cannot legally make taxable sales in the state of Iowa.
Common reasons for denials or revocations:
Failure to file or pay sales tax
Failure to comply with sales tax reporting requirements
Violations of Iowa's other sales tax laws
Set Up a Payment Plan
If you can't pay the full amount, set up a payment plan with the Department. The Department has the authority to set the terms of the payment plan.
Once the payment plan is approved and in place, and you’ve made any required payments, contact the Department to stop the permit revocation process or move forward with your permit application.
After a Revocation
If your sales permit has been revoked, the permit cannot be reinstated. You must apply for a new permit. However, this may only be an option if the issues leading to the revocation were resolved.
Individuals who owe at least $1,000 may have their professional license suspended, revoked or denied. This prohibits the individual from practicing in the state of Iowa. In addition, hunting, fishing, and other recreational licenses may be denied.
Set Up a Payment Plan
If you can't pay the full amount, set up a payment plan with the Department. The Department has the authority to set the terms of the payment plan.
Once the payment plan is approved and in place, and you’ve made any required payments, contact the Department in order to have the certificate of noncompliance withdrawn.
The Department may block your ability to renew your motor vehicle plates if there are outstanding tax liabilities or other debts that have not been paid.
To remove a vehicle registration block, follow these steps:
Pay the Debt
To lift a block, pay the entire debt including penalties and interest. Once the debt is settled, the Department will lift the block.
Set Up a Payment Plan
If you can't pay the full amount, set up a payment plan with the Department. The Department has the authority to set the terms of the payment plan.
Once the payment plan is approved and in place, and you’ve made any required payments, you may contact the Department to request that the block be lifted.
The State of Iowa Setoff Program is a method public agencies of the State of Iowa may use to collect past-due (delinquent) debts (for example, child support payments) that are owed. Sources of funds available for setoff include, but are not limited to, tax refunds, casino and sports wagering winnings, State-issued vendor payments, and Iowa Lottery winnings. Payment plans do not prevent setoffs from being applied to outstanding balances.
To avoid the setoff of a public payment, pay the debt in full to the agency to which you owe the debt.
If you believe you have been subject to a setoff in error, you may:
Challenge the Setoff
Challenges must be submitted in writing within 15 days of the date of the Notice of Setoff.
A challenge will be successful upon a determination that the debt was not qualified or that there was a mistake of fact.
Mistakes of fact may include:
The identity of the obligor, or
The amount of the setoff.
Request the split of a jointly or commonly held payment
To submit a challenge or request a split, go to govconnect.iowa.gov and click Respond to a Letter, enter the letter ID and letter date on the GovConnectIowa home screen.
The Treasury Offset Program (TOP) is a federal program that allows the collection of unpaid state income tax obligations. TOP matches people and businesses who owe debts with money that federal agencies are paying, such as tax refunds. When a match occurs, TOP withholds money to pay the debt. Payment plans do not prevent federal refunds from being applied to outstanding balances.
There are a number of options taxpayers have to resolve outstanding delinquencies with the Department in order to stop or prevent collections actions.
Offer in Compromise
You may be able to settle an unpaid debt to the Department for less than the full amount you owe if you make an offer in compromise and the Department accepts your offer. The Department may accept an Offer in Compromise if:
It is doubtful that the full amount of the debt can be collected, or
You can establish that collection of the full amount of the debt would result in severe economic hardship.
When making an offer in compromise, you must provide certified funds equal to the amount you are offering as a settlement.
View the Offer in Compromise page for additional information and the Offer in Compromise Packet.
Abatement
The Department may grant an abatement if you can demonstrate either:
That you are not liable for the amount of tax, penalty, or interest you are being billed for, or
Granting an abatement in your circumstances would promote effective tax administration by the Department.
The decision to do so is wholly discretionary, and if an abatement request is rejected, you may not appeal the decision.
View the Abatement page for additional information and abatement applications.
Key Points to Remember:
Act Quickly - Collections actions can result in the seizure of funds, so you need to act fast.
Communicate with the Department - Whether you’re paying off the debt or requesting a payment plan, constant communication with the Department is key.
Keep Records - Always keep documentation of any payments or agreements to avoid future issues.
An account number is assigned to any debt processed by the Iowa Department of Revenue. Your account number is identified on assessment and billing notices from the Department. The account number is not a social security number or FEIN.
Note: The Iowa Department of Revenue does not accept payments from financial institutions located outside the United States.
Proof of Payment
A receipt for confirmation of payments will be provided as proof of payment. This number can be provided to the Department of Revenue if you need an immediate release of your registration block or other legal actions being taken.
