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INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES, §422.25
422.25 Computation of tax, interest, and penalties — limitation.
1. a. Within three years after the return is filed or within three years after the return
became due, including any extensions of time for filing, whichever time is the later, the
department shall examine the return and determine the tax. However, if the taxpayer omits
from income an amount which will, under the Internal Revenue Code, extend the statute
of limitations for assessment of federal tax to six years under the federal law, the period
for examination and determination is six years. In addition to the applicable period of
limitation for examination and determination, the department may make an examination
and determination at any time within six months from the date of receipt by the department
of written notice from the taxpayer of the final disposition of any matter between the
taxpayer and the internal revenue service with respect to the particular tax year. In order
to begin the running of the six-month period, the notice shall be in writing in any form
sufficient to inform the department of the final disposition with respect to that year, and a
copy of the federal document showing the final disposition or final federal adjustments shall
be attached to the notice.
b. The period for examination and determination of the correct amount of tax is unlimited
in the case of a false or fraudulent return made with the intent to evade tax or in the case
of a failure to file a return. In lieu of the period of limitation for any prior year for which
an overpayment of tax or an elimination or reduction of an underpayment of tax due for
that prior year results from the carryback to that prior year of a net operating loss or net
capital loss, the period is the period of limitation for the taxable year of the net operating
loss or net capital loss which results in the carryback. If the tax found due is greater than
the amount paid, the department shall compute the amount due, together with interest and
penalties as provided in subsection 2, and shall mail a notice of assessment to the taxpayer
and, if applicable, to the taxpayer’s authorized representative of the total, which shall be
computed as a sum certain, with interest computed to the last day of the month in which the
notice is dated.
2. In addition to the tax or additional tax determined by the department under subsection
1, the taxpayer shall pay interest on the tax or additional tax at the rate in effect under section
421.7 for each month counting each fraction of a month as an entire month, computed from
the date the return was required to be filed. In addition to the tax or additional tax, the
taxpayer shall pay a penalty as provided in section 421.27.
3. If the amount of the tax as determined by the department is less than the amount paid,
the excess shall be refunded with interest, the interest to begin to accrue on the first day of
the second calendar month following the date of payment or the date the return was due to
be filed, or the extended due date by which the return was due to be filed if ninety percent
of the tax was paid by the original due date, or was filed, whichever is the latest, at the rate
in effect under section 421.7 counting each fraction of a month as an entire month under the
rules prescribed by the director. If an overpayment of tax results from a net operating loss
or net capital loss which is carried back to a prior year, the overpayment, for purposes of
computing interest on refunds, shall be considered as having been made on the date a claim
for refund or amended return carrying back the net operating loss or net capital loss is filed
with the department or on the first day of the second calendar month following the date of
the actual payment of the tax, whichever is later. However, when the net operating loss or
net capital loss carryback to a prior year eliminates or reduces an underpayment of tax due
for an earlier year, the full amount of the underpayment of tax shall bear interest at the rate
in effect under section 421.7 for each month counting each fraction of a month as an entire
month from the due date of the tax for the earlier year to the last day of the taxable year in
which the net operating loss or net capital loss occurred.
4. All payments received must be credited first, to the penalty and interest accrued, and
then to the tax due. For purposes of this subsection, the department shall not reapply prior
payments made by the taxpayer to penalty or interest determined to be due after the date
of those prior payments, except that the taxpayer and the department may agree to apply
payments in accordance with rules adopted by the director when there are both agreed and
unagreed to items as a result of an examination.
5. A person or withholding agent required to supply information, to pay tax, or to make,
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Iowa Code 2017, Section 422.25 (15, 0)
§422.25, INDIVIDUAL INCOME, CORPORATE, AND FRANCHISE TAXES
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sign, or file a deposit form or return required by this division, who willfully makes a false or
fraudulent deposit form or return, or willfully fails to pay the tax, supply the information, or
make, sign, or file the deposit form or return, at the time or times required by law, is guilty
of a fraudulent practice.
6. The certificate of the director to the effect that a tax has not been paid, that a return has
not been filed, or that information has not been supplied, as required under the provisions
of this division shall be prima facie evidence thereof except as otherwise provided in this
section.
7. The periods of limitation provided by this section may be extended by the taxpayer by
signing a waiver agreement to be provided by the department. The agreement shall stipulate
the period of extension and the year or years to which the extension applies. It shall provide
that a claim for refund may be filed by the taxpayer at any time during the period of extension.
8. A person or withholding agent who willfully attempts in any manner to defeat or evade
a tax imposed by this division or the payment of the tax, upon conviction for each offense is
guilty of a class “D” felony.
9. A prosecution for any offense defined in this section must be commenced within six
years after the commission thereof, and not after.
10. If a taxpayer files an amended return within sixty days prior to the expiration of the
applicable period of limitations described in subsection 1, the department has sixty days
from the date of receipt of the amended return to issue an assessment for any applicable
tax, interest, or penalty.
[C35, §6943-f21; C39, §6943.057; C46, 50, 54, 58, 62, 66, 71, 73, 75, 77, 79, 81, §422.25; 81
Acts, ch 131, §8, ch 133, §2, 4, ch 134, §1, 2; 82 Acts, ch 1180, §3, 8]
83 Acts, ch 160, §5; 84 Acts, ch 1025, §1; 84 Acts, ch 1173, §5; 86 Acts, ch 1007, §26; 86
Acts, ch 1241, §19; 88 Acts, ch 1028, §29; 89 Acts, ch 251, §19; 90 Acts, ch 1172, §9; 94 Acts,
ch 1133, §3, 4, 16; 95 Acts, ch 83, §3, 34; 99 Acts, ch 151, §8, 9, 89; 99 Acts, ch 152, §3, 40;
2002 Acts, ch 1150, §5; 2013 Acts, ch 110, §1
Referred to in §15.335, §99G.30A, §257.22, §321.105A, §422.10, §422.16, §422.33, §422.39, §422.66, §422D.3, §423.42, §423A.6, §423B.6,
§423C.4, §423D.4, §428A.8, §452A.66
Wed Feb 08 03:44:50 2017
Iowa Code 2017, Section 422.25 (15, 0)
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