IOWA DEPT OF REVENUE & FINANCE
IDR and the Iowa DOT Offer Settlement for Vehicle Registration Fee Evasion
Des Moines, Iowa, August 23, 2013 — The Iowa Department of Revenue (IDR) and the Iowa Department of Transportation (the Iowa DOT) are announcing a one-time, limited settlement opportunity for individuals with motor vehicles registered to out-of-state LLCs to come into compliance with Iowa law. “We see this not only as an opportunity for people to come into compliance with Iowa law, but also as an efficient way to collect Road Use Tax Fund money that is owed to the State,” said Victoria Daniels, IDR’s Public Information Officer.
By law, Iowa residents who purchase and use motor vehicles, including but not limited to cars and recreational vehicles, for use on Iowa roadways for a minimum of ninety days must pay Iowa’s five-percent fee for new registration regardless of where the motor vehicle was purchased. For many years, some out-of-state law firms have set up shell LLCs for Iowans and other non-residents for the purpose of registering RVs and other vehicles in that state. By registering vehicles to an out-of-state LLC, individuals try to avoid paying the five percent fee for new registration. Recent Iowa legislation should help put an end to this by affirming that the practice violates Iowa law and by facilitating opportunities for effective enforcement. “Iowa has been cracking down to make payment of the fee tougher to avoid and penalties easier to enforce,” states Major Paul Steier of the Iowa DOT’s Motor Vehicle Enforcement Investigative Unit.
IDR and the Iowa DOT are currently working on at least 60 known cases that fall within the scope of the new legislation. According to Steier, “state investigators across the country are networking to locate and investigate these vehicles.” To expedite resolution of these cases and to encourage voluntary compliance, the Departments are offering to settle cases on the following, non-exclusive, terms:
* Payment of the 5% fee for new registration upon the purchase price of each vehicle owned by the out-of-state shell LLC.
* Payment of a penalty of 10% of the fee for new registration for each vehicle owned by the out-of-state shell LLC.
* Registering and titling each vehicle owned by the shell out-of-state shell LLC within 30 days of entering into the settlement agreement.
* The settlement offer is not subject to any counter offer.
* The settlement agreement must be signed and the amounts due paid in full by October 23, 2013.
Interested parties should complete the form found at http://www.iowa.gov/tax/forms/VehicleDisclosureForm.pdf and e-mail it to Victoria.firstname.lastname@example.org. After October 23, 2013 non-compliant individuals will be assessed the full amount of the one-time fee, interest, and a seventy-five percent civil fraud penalty and may also be criminally charged with fraudulent practice.
To report suspected tax fraud, individuals should contact IDR at IDRSuspFiler@iowa.gov.
Individuals can also anonymously contact the Iowa DOT at 1-866-908-4636 to report Iowans they suspect may be violating this or any other state law regarding motor vehicle registration.
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Victoria L. Daniels
Iowa Department of Revenue
Major Paul Steier, Iowa Department of Transportation (515) 237-3260 www.iowadot.gov, email@example.com)