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 collection by 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. These recoverable costs include reasonable court costs, fees for expert witnesses, and attorney or accountant fees, among others. Notably, the bill removes the previous $25,000 cap on recoverable costs.

Additionally, the bill changes the definition of a "prevailing taxpayer." It stipulates that if a taxpayer substantially prevails in the dispute, the burden of proof shifts to the Department of Revenue to demonstrate that its position was substantially justified. If the Department successfully proves its justification, the taxpayer will not be considered a prevailing taxpayer and will not be entitled to recover costs. This shift in burden of proof is a significant change from current law, which required the taxpayer to prove that the Department's position was not substantially justified.

Statutes affected:
Introduced: 421.60