A couple of years ago we had received a letter from the IRS stating that we owed money. We had settled debt from credit cards and they said that we should have reported it. I was stupid and did not investigate further so I said up a payment arrangement. We paid it off in full last year. Now I received a letter from our state (Iowa) saying that we owed them now. I believe I originally did not owe because at the time I could have claimed we were insolvent. My questions now is can I get the federal money back and in turn then not have to pay the state because my 2004 return was in fac correct? Thank you in advance for help anyone can provide.