A bill for an act relating to awarding the costs in administrative hearings or court proceedings involving the collection of tax, penalties, and interest by the department of revenue.

HF 773 changes how costs are awarded to taxpayers in disputes with Iowa's Department of Revenue over tax, penalty, or interest collection. The bill removes the current $25,000 cap on recoverable costs and shifts the burden of proof: if a taxpayer substantially prevails on the amount in dispute or key issues, the Department must prove its position was "substantially justified." If the Department fails to meet this burden, the taxpayer can recover reasonable costs, including court fees, expert witness expenses, and attorney/accountant fees incurred after the initial tax notice. This directly affects taxpayers challenging tax assessments in administrative hearings or court.