What Can I Do When I Owe Taxes, Court Debt or Other Debts to the State of Iowa?
Authored By: Iowa Legal Aid
You cannot register your car. Your operator, hunting, or professional license has been suspended. The state is garnishing your wages or bank accounts. The state is offsetting benefit payments and tax refunds.These are all signs that you may owe money to the state of Iowa. If you owe the state of Iowa for certain kinds of debts, your license may also be suspended.
There are many kinds of debts that you can owe the state. These include:
- Unpaid taxes
- Unpaid court costs or fines from civil, juvenile or criminal cases
- Overpayments of state benefits like unemployment, FIP, etc.
If you owe money to the state, you will receive a notice. Do not ignore this notice. It is important for you to
know how much you owe, why you owe it, and what state agency you will be dealing with.
The state can do things that normal creditors cannot. The most common of these is suspension of licenses or car registration. This includes drivers’ licenses as well as hunting, fishing, and professional licenses. The state can also garnish wages, levy on accounts, and offset some state benefits.
Can the state garnish my wages to pay off the debt?
Yes, but within certain limits. The Iowa Department of Revenue and (sometimes a county attorney) can garnish a certain amount of your wages or a bank account to pay off the debt. For taxes, the state can theoretically garnish 100% of your wages. However, they will often accept a reasonable payment plan instead of such an extreme measure, if you request one.
For court debt and other state debt, the state can garnish the following amounts: