Capitol Update: Week 2

Tax Refunds Will Come Later This Year

The Iowa Department of Revenue is again working with the Internal Revenue Service, other state revenue agencies, and the tax filing software industry to fight tax-related identity theft and refund fraud. Operation “Security Summit,” aims for stronger protections for taxpayers in the upcoming tax filing season that begins January 23rd, 2017.

Because advances in technology have made it much easier, faster, and more profitable for criminals to steal tax information, Iowa taxpayers should be aware of some changes for this year’s tax filing season. Refunds from the Iowa Department of Revenue may take longer. The Department has extensive fraud software built into the tax processing systems—and this means dedicating more time to verifying the validity of tax refund claims before sending out refunds. The hope is that the extra time helps to ensure the right person gets the right refund and that criminals get no refund.

Another thing for Iowa taxpayers to be aware of is that no Earned Income Tax Credit refunds will be paid until early March. Beginning in 2017, the IRS will be holding onto refunds of tax returns claiming the Earned Income Tax Credit until mid-February. This delay was created to protect taxpayers by giving the IRS more time to detect and prevent fraud. The Iowa Department of Revenue will also need to take extra time to apply its own fraud checks to those refund claims.

FY 2017 Deappropriations Bill

The state is facing a $117 million shortfall in revenues to maintain the spending levels approved by the 2016 Legislature.  To fix this problem, the 2017 Legislature needs to reduce spending levels so they do not exceed revenue.

The state cannot spend money it does not have.  When the Legislature adjourned in April, total spending was less than available revenue.  Since then revenue has dropped creating the need to reduce costs to maintain a balanced budget and prevent a tax increase.

In the future it may be wise to hold down overall spending below amounts allowed by the state’s 99% Expenditure Limitation Law.  This law only allows the state to spend 99% of our total revenue and leaves the other 1% in reserve.

News from District 96

It was a short week in Des Moines because of Martin Luther King Jr. Day.  We did not gavel in until Tuesday.  The Iowa Turkey Federation spoke to the Ag Committee on Wednesday about the turkey industry and issues that were important to the group.  I enjoyed their presentation.

It was an honor to welcome Ron Struble to the Capitol this week. Ron is a veteran and a member of American Legion Post 45 in Manchester.  Being new to serving on the Veterans Affairs Committee I appreciated his thoughts on the needs of the Veterans Community.  I am grateful for his and all of our veterans’ services.

 

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