HF 2095 (LSB 5193YH (4) 91)

HOUSE FILE 2095

BY  FISHER

A BILL FOR

An Act requiring the filing of a tax return when child support obligations are delinquent, and providing for penalties.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 252B.7, subsection 1, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  e.  Cases involving violations of section 421.27, subsection 8A.
    Sec. 2.  Section 252B.23, subsection 8, Code 2026, is amended to read as follows:
   8.  a.  If an obligor does not pay the amount of the arrearage, does not contest the referral, or if following child support services’ review and any court hearing child support services or the court does not find a mistake of fact, the arrearages shall be referred to a collection entity. Following the review or hearing, if child support services or the court finds a mistake in the amount of the arrearage, the arrearages shall be referred to the collection entity in the appropriate arrearage amount. For arrearages referred to a collection entity, the obligor shall pay a surcharge equal to a percent of the amount of the support arrearage due as of the date of the referral. The surcharge is in addition to the arrearages and any other fees or charges owed, and shall be enforced by the collection entity as provided under section 252B.5. Upon referral to the collection entity, the surcharge is an automatic judgment against the obligor.
   b.  The director or the director’s designee shall notify the department of revenue of an obligor’s referral to a collection agency, and shall notify the department of revenue if the obligor’s support arrearage is no longer being collected by the collection agency.
    Sec. 3.  Section 331.756, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  25.  At the request of the attorney general, prosecute violations of section 421.27, subsection 8A.
    Sec. 4.  Section 421.27, Code 2026, is amended by adding the following new subsection:
   NEW SUBSECTION.  8A.  Failure to make a return by obligor.  In addition to the penalties imposed by this section, an obligor who willfully fails to make a return in violation of section 422.13, subsection 1, paragraph “d”, commits a serious misdemeanor.
    Sec. 5.  Section 422.13, subsection 1, paragraphs b and c, Code 2026, are amended to read as follows:
   b.  (1)  The net income of a nonresident which is allocated to Iowa pursuant to section 422.8, subsection 2, is one thousand dollars or more for the tax year from sources taxable under this subchapter, unless the nonresident’s total net income, as determined under section 422.5, subsection 2 or 3, does not exceed the appropriate dollar amount listed in section 422.5, subsection 2 or 3, upon which tax is not imposed. The portion of a lump sum distribution that is allocable to Iowa is included in net income for purposes of determining if the nonresident’s net income allocable to Iowa is one thousand dollars or more.
   (2)  This paragraph does not apply to an obligor subject to paragraph “d”, subparagraph (1).
   c.  (1)  The total net income, as determined under section 422.5, subsection 2 or 3, of a resident of this state is more than the appropriate dollar amount listed in section 422.5, subsection 2 or 3, upon which tax is not imposed.
   (2)  This paragraph does not apply to an obligor subject to paragraph “d”, subparagraph (2).
    Sec. 6.  Section 422.13, subsection 1, Code 2026, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  d.  (1)  The individual is a nonresident with any net income that is allocated to Iowa pursuant to section 422.8, subsection 2, from any sources under this subchapter, and who is an obligor that has an unpaid support arrearage at the end of the tax year which has been referred to a collection agency pursuant to section 252B.23, subsection 8.
   (2)  The individual is a resident who is an obligor that has an unpaid support arrearage at the end of the tax year which has been referred to a collection agency pursuant to section 252B.23, subsection 8.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill requires the filing of a return when child support obligations are delinquent.
   The bill requires the director of health and human services (HHS) or the director’s designee to notify the department of revenue (DOR) when a obligor’s child support obligations are delinquent and referred to a collection agency. The bill also requires HHS to notify DOR if the obligor’s delinquent child support is no longer being collected by the collection agency.
   Upon a delinquent child support obligation referral to a collection agency under the bill, an obligor who is a resident of this state is required to file a tax return regardless of whether the obligor’s income is under the individual income tax filing thresholds for filing a return in Code section 422.5, if the child support remains delinquent at the end of the tax year. For an obligor who is a nonresident with any income that is allocated to this state, the bill requires the nonresident to file a tax return in this state. Currently, a nonresident is not required to file a return in this state if the income allocated to this state is less than $1,000.
   A resident or nonresident obligor who violates the bill by not filing a tax return commits a serious misdemeanor. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $430 but not more than $2,560.
   The bill specifies the attorney general or a county attorney, at the request of the attorney general, may prosecute violations of the bill.