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LEADERSHIP AGENDA

ECONOMIC INDICATORS

DEPARTMENT PERFORMANCE

DEPARTMENT PERFORMANCE

Revenue

Courtney Kay-Decker, Director

Mission Statement:
To serve Iowans and support government services in Iowa by collecting all taxes required by law, but no more.

eFile success story
ePayments
Exam and Audit Costs
Collection Enterprise Costs

•  Performance Plan - How we measure our progress


•  Strategic Plan - How we plan for progress


•  Performance Report - How we report our progress


• Department Home Page - Learn more about this department

Why this is important:
Without being required, Iowans choose to e-file in increasing numbers every year, which reduces tax errors and saves State resources. The cost of processing an electronic return in FY 2017 was estimated to be only $0.33 compared to an estimated $3.32 to process a paper return.


What we're doing about this:
The Department works closely with the IRS to encourage taxpayers to file both the federal and State income tax returns electronically. The Department also works closely with tax preparers and software vendors to update forms annually and encourage availability of electronic filing options.

Iowa participates in the Free File Alliance, which provides free electronic filing to taxpayers whose incomes are less than $66,000. Links to online software are available on the Department's website.

The Department also markets electronic filing to tax practitioners and taxpayers. Each year the Department asks business and professional organizations and the media to include Iowa e-filing information when they communicate with their customers about taxes.

Why this is important:
Deposits made electronically are processed faster than paper transactions. Efficient deposits in the General Fund and other State funds allow State government to reliably provide services to the citizens of Iowa.


What we're doing about this:
Electronic filing of payments is encouraged for monthly and annual filers of sales and withholding taxes. In the state of Iowa, more than 120,000 businesses collect and remit sales tax on behalf of customers and more than 50,000 employers withhold and remit income tax on behalf of employees. Electronic payment options are also available for individual income, corporation income, and fiduciary taxpayers. Some taxpayers are required to pay electronically (fuel excise tax filers and semi-monthly filers of withholding and sales tax payments); however, others choose to.

The Department conducted an analysis of how taxpayers submit payments to better understand taxpayer behavior regarding the choice of electronic payment options. The Department discovered that taxpayers utilizing professional tax preparers are the largest source of paper payments received and that over 60 percent of individual income taxpayers in every age classificiation paid via check.

Why this is important:
When taxpayers fail to pay established tax liabilities to the State, the Department undertakes efforts to collect all taxes owed. The Centralized Collection Unit (CCU) is comprised of both Revenue employees and a third-party vendor. In addition to assisting with tax collections, the third-party vendor also provides collection services for Judicial Branch (Courts), Department of Human Services Child Support Recovery Unit, Department of Natural Resources, Iowa Department of Revenue, and Iowa Workforce Development (IWD). As of July 1, 2015, the Court stopped placing accounts with CCU. In July 2016, CCU returned all Court accounts not in a pay plan. In June 2017, CCU returned all remaining Court accounts to the Judicial Branch. CCU began providing limited collection services to Iowa Workforce Development in April 2016. In May 2017, CCU returned all accounts to IWD.


What we're doing about this:
The Department strives to provide consistent, fair, and professional collection services. CCU is in the pocess of obtaining a stand-alone account management system in an effort t increase business. The goal is to create new collection partnerships, while maintaining existing partnerships.

Why this is important:
Through audit programs undertaken by the Compliance Services staff and the Tax Gap Program, the Department identifies taxpayers who failed to file returns or incorrectly calculated tax liabilities on filed returns. The costs of operating those audit programs to identify non-voluntarily paid taxes should be less than the resulting revenue.

What we're doing about this:
The Department has reorganized to improve coordination between audit and collection staff.

Audit programs are regularly reviewed to ensure both a positive return on investment and compliance effectiveness.

The Department continues to invest in technology to improve our ability to detect non-compliance and support enforcement efforts.

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