This bill amends Section 421.60 of the Iowa Code to modify the process for awarding costs in administrative hearings or court proceedings related to tax disputes with the Department of Revenue. It allows a prevailing taxpayer to recover reasonable costs incurred after the issuance of a notice of assessment or denial of a claim for refund. The recoverable costs include reasonable court costs, market rates for expert witnesses, and fees for independent attorneys or accountants, while striking the previous $25,000 cap on recoverable costs.

Additionally, the bill changes the definition of a "prevailing taxpayer." It shifts the burden of proof to the Department of Revenue if the taxpayer can demonstrate that they have substantially prevailed in the dispute. If the department can prove that its position was substantially justified, the taxpayer will not be considered a prevailing taxpayer and will not be entitled to recover costs. This change simplifies the process for taxpayers and alters the criteria under which they can claim costs associated with tax disputes.

Statutes affected:
Introduced: 421.60