2008 Woodie Awards
Tax amnesty garners millions
George Sweeney - The Daily Iowan
Issue date: 11/30/07 Section: Metro
The state of Iowa raked in $26.5 million between Sept. 4 and Oct. 31 in a tax-amnesty program, said Mark Schuling, the head of the Iowa Department of Revenue.
When Iowa Gov. Chet Culver signed the bill in May, the projected earnings from the program were $16 million, according to a statement from the department.
"We've been really aggressive" in going after delinquent individual and corporate taxpayers, Schuling said. "But we can't catch them all."
The department received payments from more than 6,000 known Iowa taxpayers, as well as 2,400 who had never filed before. It allowed those who owed the state to pay their due with no additional penalties and required them to pay half the interest that would have accrued on what they owed.
This was the first amnesty in Iowa since 1986, Schuling said. The amnesty bill also included a provision prohibiting another similar program from happening until 2025, he said.
"That they did it once is wonderful," said Madeline Windauer, the director of tax for RSM McGladrey, a national accounting and consulting firm. Amnesty programs can bring in lots of money, but holding them often could be a disincentive for paying taxes on time, she said.
Though Windauer said she didn't think her firm handled any amnesty requests, she said many reasons could explain why someone would come clean in an amnesty program.
People could have made honest mistakes in the past or could have purposely evaded paying taxes, she said. Some might not have thought they owed anything and did not file returns, or some might not have filed in the past because they simply didn't have the money they needed to pay their taxes at the time, she said.
Kate O'Neill Rauber, a spokeswoman for H&R Block, said most clients who enlisted her firm's help in paying overdue taxes had committed "honest mistakes," when they had originally filed their taxes incorrectly.
But it's difficult to find honest mistakes without carefully looking over tax returns from years past or learning of increased income or decreased expenses by chance, Windauer said.
"It's hard to say how [someone] would be able to find out" if they accidentally misfiled their taxes in the past, she said, because most people don't look through their old tax documents.
But Windauer wouldn't say what would motivate someone to come clean on their taxes.
"Some people just want to, and some would rather let sleeping dogs lie," she said.
E-mail DI reporter George Sweeney at:
george-sweeney@uiowa.edu
When Iowa Gov. Chet Culver signed the bill in May, the projected earnings from the program were $16 million, according to a statement from the department.
"We've been really aggressive" in going after delinquent individual and corporate taxpayers, Schuling said. "But we can't catch them all."
The department received payments from more than 6,000 known Iowa taxpayers, as well as 2,400 who had never filed before. It allowed those who owed the state to pay their due with no additional penalties and required them to pay half the interest that would have accrued on what they owed.
This was the first amnesty in Iowa since 1986, Schuling said. The amnesty bill also included a provision prohibiting another similar program from happening until 2025, he said.
"That they did it once is wonderful," said Madeline Windauer, the director of tax for RSM McGladrey, a national accounting and consulting firm. Amnesty programs can bring in lots of money, but holding them often could be a disincentive for paying taxes on time, she said.
Though Windauer said she didn't think her firm handled any amnesty requests, she said many reasons could explain why someone would come clean in an amnesty program.
People could have made honest mistakes in the past or could have purposely evaded paying taxes, she said. Some might not have thought they owed anything and did not file returns, or some might not have filed in the past because they simply didn't have the money they needed to pay their taxes at the time, she said.
Kate O'Neill Rauber, a spokeswoman for H&R Block, said most clients who enlisted her firm's help in paying overdue taxes had committed "honest mistakes," when they had originally filed their taxes incorrectly.
But it's difficult to find honest mistakes without carefully looking over tax returns from years past or learning of increased income or decreased expenses by chance, Windauer said.
"It's hard to say how [someone] would be able to find out" if they accidentally misfiled their taxes in the past, she said, because most people don't look through their old tax documents.
But Windauer wouldn't say what would motivate someone to come clean on their taxes.
"Some people just want to, and some would rather let sleeping dogs lie," she said.
E-mail DI reporter George Sweeney at:
george-sweeney@uiowa.edu
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