H.F. 2529 Section 1. WAIVER OF PENALTIES AND INTEREST —— REFUNDS. 1 1. Notwithstanding sections 421.8, 421.27, and 422.25, if a 2 taxpayer has filed a return for tax year 2008 relying in good 3 faith on the expectation that the state of Iowa would conform 4 to the federal Internal Revenue Code in computing net income 5 for state tax purposes, the director of revenue shall, for any 6 taxpayer amending the return in the time permitted by statute, 7 waive any penalty or interest due as a result of either a 8 failure to timely pay the tax due or the filing of a defective 9 or incorrect return. 10 2. If, prior to the effective date of this Act, a taxpayer 11 paid penalties or interest as a result of a good-faith reliance 12 on the state conforming to the Internal Revenue Code in 13 computing net income for state tax purposes, the department 14 of revenue shall refund such penalties and interest to the 15 taxpayer. 16 Sec. 2. EFFECTIVE UPON ENACTMENT AND RETROACTIVE 17 APPLICABILITY. This Act, being deemed of immediate importance, 18 takes effect upon enactment and applies retroactively to 19 January 1, 2008, for tax years beginning on or after that date 20 and before January 1, 2009. 21 EXPLANATION 22 This bill relates to the assessment of penalties and 23 interest against taxpayers who filed returns expecting the 24 state of Iowa to conform with certain federal income tax 25 provisions. 26 In 2009, the state of Iowa did not conform to the federal 27 provisions related to the computation of net income. This 28 bill allows the director of revenue to waive the assessment of 29 penalties and interest against taxpayers who relied in good 30 faith on the state conforming to the federal provisions and who 31 timely amend their return. Any penalty and interest paid are 32 to be refunded. 33 The bill takes effect upon enactment and applies only to tax 34 year 2008. 35 -1- LSB 5339HV (2) 83 tw/sc 1/ 1