Dan Huseman, Week 3 — January 26, 2017

Last week, the ice storm made the trip back to Des Moines difficult for many legislators. This week, the heavy snow in Northern Iowa will make it hard for some lawmakers to even get home. While the City of Des Moines only received a couple of inches of snow, it was still slippery out there. Even though there is more snow up our way, I still can’t wait to get home.

Standing committees are in full swing, and we are starting to see a few bills make it to the House Floor for debate. We have not voted on anything yet, but that will change next Monday.

Budget sub-committees are meeting as well, as agencies and other presenters make their pitch for state funding.   The budget bills will not be ready for several more weeks.

You may have heard by now that the state budget for FY2017, which we are in right now, is experiencing a $117 million shortfall. When we adjourned last Spring, the budget was balanced. However, since then, revenues have slipped a little. Since the State does not print money like Uncle Sam, reductions must be made. The Governor said from the start that we were not going to cut K-12 education, Medicaid and the property tax backfill to local governments. This is fine, but it puts an extra strain on the rest of the budget, especially when we are already half way into the budget year. The cuts being proposed are painful, and nobody wants to make them. But they are necessary so we can put this issue behind us and move on to the FY 2018 budget. Overall, Iowa’s economy is sound – it is just that revenues are not coming in at the estimated pace. On a final note, the Senate was scheduled to debate the spending reduction bill on Thursday of this week, and the House will take it up next Monday.

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.

In the coming weeks, Iowa taxpayers may experience correspondence from the Iowa Department of Revenue. The Department’s fraud protection process may require examiner outreach and taxpayers who receive correspondence should contact the employee listed as soon as possible to expedite the process.

The Iowa Department of Revenue has also published the following tips to help Iowa taxpayers protect themselves from identity theft:

• Secure your own computer with firewall and anti-virus protections that are always turned on and can automatically update.
• Use strong passwords.
• Encrypt sensitive files, such as tax records, stored on your computer.
• Be wary of tax scams.

The IRS also has a comprehensive web page with information and resources for preventing and handling identity theft at https://www.irs.gov/individuals/identity-protection.

 You may reach me at the Capitol during the week by phoning me at 515-281-3221, or at home on weekends at 712-434-5880. You may write me at the State Capitol, Des Moines, Iowa, 50319. My home address is P. O. Box 398, Aurelia, Iowa 51005.   If you have email, please contact me at dan.huseman@legis.state.ia.us.