State of Iowa v. Marc A. Hagen, 2013 Iowa Sup. LEXIS 121

Marc Hagen pled guilty to four counts of fraudulent practices for willful failure to file or pay Iowa income taxes 2006–2009.
The State sought restitution including unpaid taxes, penalties (civil fraud and 2210), and accrued interest.
The district court ordered restitution for unpaid taxes but denied penalties and interest in the restitution order.
At restitution hearing, the State introduced a department summary and auditor testimony detailing calculations for taxes, penalties, and interest.
Hagen argued he lacked ability to pay; the court reserved restitution amount for later determination and ultimately ordered only unpaid taxes.
The State sought discretionary review; the Supreme Court reversed and remanded for penalties and interest consistent with its opinion.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Is the State a victim under restitution statutes?	Hagen's crime caused the State pecuniary damages through lost tax revenue.	Hagen contends the State cannot be a victim because it is already a party to the case.	Yes; the State qualifies as a victim under Iowa Code chapter 910.
Whether penalties should be included in the restitution order	Civil tax penalties are pecuniary damages and properly include in restitution.	Penalties are not within the restitution statutory framework as criminal penalties to be paid to a clerk of court.	Penalties must be included in the restitution order.
Whether interest on unpaid taxes should be included in restitution	Prejudgment and postjudgment interest are warranted to fully compensate the State under statutory, civil-recovery framework.	Restitution should not be treated as a judgment; interest may be inappropriate absent explicit authorization.	Prejudgment and postjudgment interest must be included at statutory rates; remand for calculation.

State v. Akers, 435 N.W.2d 332 (Iowa 1989) (interest on restitution not ordinarily allowed without explicit statutory authorization)
In re Santa Rosa Sales & Marketing, Inc., 475 N.W.2d 210 (Iowa 1991) (restitution not to be treated as a civil judgment absent explicit authorization)
State v. Bonstetter, 637 N.W.2d 161 (Iowa 2001) (restitution serves compensatory purposes; cost of audits can be recoverable as pecuniary damages)
State v. Paxton, 674 N.W.2d 106 (Iowa 2004) (assessing what a victim could recover in civil action informs restitution amount)
State v. Taylor, 506 N.W.2d 767 (Iowa 1993) (upholding restitution for costs associated with a criminal activity when appropriate)