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Billings and Collections FAQs

PAYMENTS

1. Payment Plans:
I received a bill and would like to set up a payment plan. Can I do that?

2. Due Date on Bill:
Why doesn't the due date on the billing notice allow me enough time to get this paid?

3. Duplicate Bill:
I've already sent my payment, why did I receive another bill?

4. Uncashed Check:
Why hasn't my check cleared the bank yet?

5. Credit for Payment:
I sent my payment with my return. Why didn't I get credit?

6. Vendor Payments:
Why are you taking my vendor payment?

REFUNDS

7. Federal Refund:
Why are you taking my federal refund when you have my state refund?

8. State Refund:
Why are you holding my state refund?

BALANCE DUE INQUIRY

9. Additional Bill:
Why are you billing me for more sales tax? I paid what I collected.

10. Amend Return:
How do I correct a mistake on my tax return?

11. No Tax Due: I didn't owe any sales and/or withholding for these periods. Why did you bill me?

12. Sent Information: Why did I receive another bill after I sent you the information you needed?

LATE FILED RETURNS

13. Penalty and Interest:
I mailed my payment on time. Why are you billing me for penalty and interest?

14. Bill for More Tax:
Why did I receive a bill showing that I owe tax? Although I sent my return and payment late, I paid all the tax.

15. Remove Penalty:
I don't think I should have to pay this penalty. Can it be removed?

UNREPORTED INCOME TAX BILLING

16. What Income?
What unreported income are you billing me for?

17. Why Bill Now?
Why am I just now getting billed for this?

18. Already Paid?
Didn't I pay this last year?

19. Why Interest?
Why do I have to pay interest when you're just now billing me?

PAYMENTS

1. I received a bill and would like to set up a payment plan. Can I do that?

We will normally send you two notices if you owe additional tax. The first notice is followed 20 days later by the Notice of Assessment. The Notice of Assessment allows you 60 days from the notice date to respond. During this 80-day period, payments can be made at anytime.

The top portion of your billing notice is detachable. Please detach and send the coupon with your payment in the return envelope provided.

We will not send additional billing notices with coupons attached. If you need to make more than two payments, please be sure to include your name, address, account number and/or Social Security Number, sales tax permit number or Federal Identification Number with your payment and mail to:

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

If we do not receive payment in full within the 80-day period, the balance due on your account will go to our collections section.

Exception: If you have been billed for "Return Received without Payment" or "Unhonored Check," your account goes directly to the collections section. If you cannot make payment in full, contact us at 515/281-6944.

2. Why doesn't the due date on the billing notice allow me enough time to get this paid?

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 at the end of each 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.

3. I've already sent my payment, why did I receive another bill?

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 our call center at 515/281-3663.

4. Why hasn't my check cleared the bank yet?

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 Social Security Number, sales tax permit number, Federal Identification Number.

Please be sure to send your payment to the correct address.

5. I sent my payment with my return. Why didn't I get credit?

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

6. Why are you taking my vendor payment?

You have a tax debt with the Iowa Department of Revenue. For more information regarding this debt, call 515/281-3663.

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

REFUNDS

7. Why are you taking my federal refund when you have my state refund?

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

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

8. Why are you holding my state refund?

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 for tax debt, that does not stop us from taking your refund(s) to pay the balance due.

BALANCE DUE INQUIRY

9. Why are you billing me for more sales tax? I paid what I collected.

We calculate how much sales tax you owe based on the information you supply on your quarterly 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 xxx.xx
Divided by x.xx this number is the state sales tax plus local option
= Gross sales xxx.xx

EXAMPLE:
Gross receipts 150.00
Divided by 1.07 (Sale 1.00 + 7% tax)
= Gross sales 140.18

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

Please check the following for the tax requirements in your area: Iowa local option tax information

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. Please attach the copies to the billing notice and mail in the envelope provided.

If you are taking a credit from sales tax paid in a prior quarter, you will need to amend that quarter and show the credit. (See information concerning amending returns in answer to Question 10 below.)

The local option tax was incorrect on your return.
(Iowa local option tax information)

For further assistance, call our call center at 515/281-3663.

10. How do I correct a mistake on my tax return?

You can amend (file another return) to correct your mistakes.

Amend your sales tax return through eFile & Pay.

11. I didn't owe any sales and/or withholding for these periods. Why did you bill me?

You must file a sales and/or withholding return even if you have no tax to report. If you are registered to file sales tax and/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 and/or withholding tax.

      Iowa tax return due date calendar (Excel)

      Registration change or cancel form (pdf)

Late filing of sales tax returns may result in you being required to post a bond to avoid revocation of your sales tax permit. This bond will be equal to 5 times your monthly sales tax remittance if you file monthly or 9 times your monthly sales tax if you file quarterly. Bonds are required for monthly filers with more than three delinquencies or quarterly filers with more than one delinquency in a 24-month period.

12. Why did I receive another bill after I sent you the information you needed?

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 our call center at (515) 281-3663.

LATE FILED RETURNS

13. I mailed my payment on time. Why are you billing me for penalty and interest?

We bill penalty and interest based on the postmark date on the envelope in which the return and/or payment was mailed or the date we received the transmission if you are an EFT (Electronic File Transfer) filer.

14. Why did I receive a bill showing that I owe tax? I sent my return and payment late and I paid all the tax.

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:

 
Tax
Penalty
Interest
Fee
Total
Owed
150.00
15.00
1.20
166.20
Paid
-133.80
-15.00
-1.20
-150.00
Balance
16.20



16.20
Billing
16.20

.12
16.32

 

 

 

 

Interest continues to accrue on the balance of the tax amount due and will be added at the end of each month.

15. I don't think I should have to pay this penalty. Can it be removed?

You may request a waiver of penalty by writing a letter to the Department explaining why the return and/or payment was late. The letter must ask for "a waiver of penalty." Send the letter with the billing notice to us in the return envelope we provided you.

Iowa Department of Revenue
Hoover State Office Bldg
PO Box 10471
Des Moines IA 50306-0471

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.

UNREPORTED INCOME TAX BILLING

16. What unreported income are you billing me for?

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.

Iowa Department of Revenue
Hoover State Office Bldg
PO Box 10471
Des Moines IA 50306-0471

17. Why am I just now getting billed for this?
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.

18. Didn't I pay this last year?

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).

19. Why do I have to pay interest when you're just now billing me?

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) and/or miscellaneous income (1099misc) that had Iowa tax withheld, please send a copy of your W-2, W-2G and/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.

Iowa Department of Revenue
Hoover State Office Bldg
PO Box 10471
Des Moines IA 50306-0471

If you need further assistance, contact our call center at (515) 281-3663.