November 27, 2015

Federal and state tax officials push Iowans to be safer with financial info

revenue-departmentThe Internal Revenue Service is launching a new campaign with the Iowa Department of Revenue and the state’s private sector tax industry to nudge Iowans into taking more precautions with their sensitive financial information.

Christopher Miller, a spokesman for the IRS in Iowa, says identity thieves are becoming more sophisticated all the time and taxpayers need to keep up or they may become victims.

“We want to encourage people when they file their taxes at home and whenever they’re working with personal information at home, to use security software to protect their computers,” Miller says. “That includes firewalls and anti-virus protection.” Authorities say ID thieves are using personal data from real taxpayers to create fake state and federal tax returns to claim real refunds.

Miller says Iowans have to be on guard for crooks who are trolling to rip you off using telephone and email “phishing” cons. “If you get a call from someone posing as an IRS agent and they threaten you with jail or lawsuits, it’s a scam, hang up,” Miller says. “We also want to encourage people to protect their personal information. Do not routinely carry your Social Security number.” Also, oversharing on social media gives identity thieves even more personal details.

The new IRS campaign is called “Taxes. Security. Together.” and it aims to raise public awareness that even routine actions on the Internet and with personal electronic devices can affect the safety of financial and tax data. “Your tax returns are sensitive data so you have to treat that information just like you would cash, don’t leave it laying around,” Miller says. “Properly dispose of old tax returns and other sensitive documents by shredding them before you put them in the trash.”

The campaign includes several components, including YouTube videos, consumer-friendly Tax Tips each week and local events. Several IRS publications are being added or updated to help taxpayers and tax professionals at, state web sites and platforms used by the tax preparation community.

The campaign will continue through the April tax deadline.



State tax collections down 2.9 percent in October

State tax revenues continue to lag. The state collected nearly three percent less in overall taxes in October compared to the same month a year ago.

“General fund revenues were a little bit disappointing in October and that’s kind of been a trend lately,” says Jeff Robinson, an analyst for the Legislative Services Agency.

Individual income tax payments to the state were up five percent last month, but corporate income tax refunds were pretty large.

“That provided quite a drag on revenue,” Robinson says.

Sales and use taxes account for a big chunk of tax collections, but sales and use tax payments to the state were down 1.3 percent in October.

“Sales and use tax has been weak for a number of months now,” Robinson says. “…That is a disappointment, particularly given the price of gasoline.”

According to the AAA, gasoline prices in Iowa are about 70 cents per gallon cheaper today than they were a year ago. Robinson says Iowans don’t appear to be spending the money they may be saving on energy costs, however. Experts had predicted overall state tax revenue would be growing at a four percent clip, but there’s been just a slim, 0.1 percent increase since July 1.

“The trend for the first four months of this cash fiscal year has not been positive other than personal income tax and, unfortunately, what we’re finding so far is that personal income tax can’t hold the revenue stream together if all the rest of them are declining,” Robinson says, “so hopefully what comes in the future months is that what is happening in personal income tax are just transient things that disappear.”

A three-member panel of financial experts will meet in December to review the data and set an official estimate of state tax collections. That estimate must be used by the governor and lawmakers as they draft next year’s state budget.

Kasich says he’s offering ‘reasonable stuff’ rather than ‘fantasy’ ideas

Republican candidate John Kasich is promising to eliminate the U.S. Department of Commerce if he’s elected president. Kasich said today he’s offering “reasonable stuff” that can be accomplished and he dismissed some of his competitors ideas as sheer “fantasy”.

“I’ve got them all upset now because I’ve been making comments about not the people’s personalities, but some of the policy positions of the people running for president,” Kasich said. “You know, I’m just going to kind of do what I’ve done all my career and kind of tell it like it is and we’ll see where the chips fall.”

Kasich, a former Ohio congressman, served as chairman of the House Budget Committee in the 1990s. Kasich is currently Ohio’s governor. He’s calling for reforming entitlements like Medicare and Social Security. While Kasich would increase military spending, he is calling for reforming the Pentagon bureaucracy as well.

“And we will have a tax cut plan that will be within bounds and, add it all together, we will get to a balanced budget and then we can begin to pay down debt,” Kasich said. “And why is that important? Because if we can stabilize all of that, then we can be in position where we can have the kind of job growth we want.”

Some of the other Republicans running for president have called for a so-called “flat” tax on income. Ben Carson, for example, has suggested a rate of “close to 15 percent.” Kasich said that would “blow the deficit up.”

“The danger here is picking people who are inexperienced means that you might pick somebody that doesn’t know how to do the job,” Kasich said.

Kasich prefers “the old Reagan approach” on tax policy, reducing rates for individuals, lowering the capital gains tax and keeping deductions for mortgages and charitable contributions. Kasich made his comments late this morning during taping of the “Iowa Press” program that will air on IPTV this Friday.

Governor says FY 2017 state budget must be ‘very frugal’

Governor Terry Branstad.

Governor Terry Branstad.

Governor Terry Branstad says the next state budget plan he’ll begin drafting soon must be “very frugal.” The current state budgeting year began July 1st and a panel of state financial experts has signalled state tax collections are $121 million lower than expectations. Branstad says the lagging farm economy is the main reason.

“Commodity prices for corn and soybeans are not good and we went through the bird flu issue and that’s created some challenges for agriculture,” Branstad says. “But we’ve had a very good harvest and hopefully the December revenue estimate will be a little better than October.”

Branstad must base his budget plan for the next fiscal year on the estimate of state tax revenue that’s issued by a panel of experts in December. The governor expects the prediction will indicate tax revenue will be higher next year, but perhaps not grow as robustly as experts thought this past spring.

“I think we can live with that and not make significant cuts,” Branstad says, “but we’re going to have to be very frugal and very careful to manage our resources wisely.”

Branstad and legislators have promised increased spending next year on teacher mentoring programs as well as an increase in payments to local governments to replace reduced commercial property tax revenue. To keep those commitments, there may be reduced spending in other areas. In the current budgeting year, the State of Iowa is still expected to see a three-point-four percent increase in the amount of taxes Iowans pay.

(Reporting by Dennis Morrice, KLEM, Le Mars; additional reporting by Radio Iowa’s O. Kay Henderson)


Grassley waiting to see details of budget deal

Senator Chuck Grassley

Senator Chuck Grassley

Iowa Senator Chuck Grassley has yet to see the 144-page document that details the tentative budget agreement between Congress and the White House. Grassley, a Republican, says the announcement was made around midnight when he and most of his staff were asleep.

“What’s probably positive about it is the sense that we’re reaching a bipartisan agreement before the limit on debt runs out,” Grassley says. “Whether or not I can vote for it, we’ll have to wait and see what the contents are.” The agreement aims to set government spending levels for the next two years while extending the nation’s debt limit through 2017.

“Shutting down government is not an option when you have a big budget deficit,” Grassley says. “It costs money to shut down the government and it costs money to open up the government. You shouldn’t do fiscally irresponsible things like shutting down the government and adding to the national debt.” The current funding plan for the federal government is set to expire on December 11th, while the debt limit deadline will arrive next week, November 3rd. Grassley is withholding judgment on the tentative budget deal.

“The biggest question is, what does it do for the long term?” Grassley says. “If we do this, a year and a half from now, are we going to have to increase the national debt again? That’s the big item. Does it do anything long term about the fiscal condition of the federal government?”

A vote could come in the U.S. House as soon as tomorrow. Congressman Paul Ryan, a Republican from Wisconsin, is considered likely to be elected on Thursday as the new House Speaker.


Branstad says $46 million tax break for manufacturers will stand (AUDIO)

Governor Terry Branstad.

Governor Terry Branstad.

Governor Terry Branstad says he’s confident Republican legislators in the Iowa House will not block his proposal to extend an estimated $46 million tax break to Iowa manufacturers.

“They have supported it and passed the bill twice that would do something similar to that,” Branstad said this morning during his weekly news conference.

Branstad’s Department of Revenue has drafted a rule that would no longer tax “consumable supplies” used in the manufacturing process, things like drill bits and hydraulic fluid. That new tax policy is scheduled to go into effect July 1. It’s a big tax break Democrats say should be passed by legislators.

“This is no change in the law,” Branstad said. “This is merely a clarification to modernize the definition under what modern manufacturing is all about.”

AUDIO of Branstad’s weekly news conference

Branstad told reporters he’s “very careful” when taking this kind of executive action. Critics point out the courts have ruled Branstad exceeded his executive authority in closing Iowa Workforce Development offices. Another lawsuit challenging Branstad’s unilateral decision to close the Iowa Juvenile Home was dismissed. The Iowa Supreme Court said the issue was “moot” since the home had been closed for over a year and legislators did not appropriate money to reopen it.

Businesses in Eddyville, Cedar Rapids, Clive, West Burlington win state incentives

IDEDFour businesses were awarded state incentives today by the Iowa Economic Development Board with the promise of creating new jobs.

Iowa Economic Development Authority spokesperson, Tina Hoffman, says Ajinomoto Heartland in Eddyville won state assistance. “They have a production facility in Eddyville and they use a fermentation process to produce amino acids that are used in animal feed,” Hoffman says.

She the company plans to expand AND were awarded tax benefits with a maximum value of $1.7 million. “That is a pretty big project, a 42 million dollar project, that will create 10 jobs,” according to Hoffman. The company has operated a production facility in Eddyville since 1986 and uses corn sugar produced at the neighboring Cargill plant in its processing.

The General Electric Company won state incentives for an expansion in West Burlington. “They were awarded a $930,000 forgivable loan through the high quality jobs program,” Hoffman says. “And they actually will be creating 128 jobs, and it’s a $7.4 million project.” The project involves remodeling and upgrading the existing West Burlington facility and investing in machinery and equipment.

TrueNorth Companies in Cedar Rapids is a financial services company that won tax benefits to expand their workspace. Hoffman says they will get a maximum amount of $138,436 to create 57 jobs, with a promised capital investment of $2.5 million. Hoffman says the new space will include a combination of offices, conference/meeting areas, additional restrooms and open floor space for work stations, along with the new jobs. She says the new jobs have a wage of $23.62 an hour.

A Clive vending company, 8040 Holdings, won $278,500 in tax benefits. “They are planing to expand to add in a new line based on a new software platform that they’ll have that will upgrade standard vending machines,” Hoffman explains. The company plans investing $5.1 million and promises to create three new jobs.