These tests are two different issues. First the ISTEP: this "high-stakes" test is for public school students only, and doesn't apply to non-accredited, non-public (private) schools. Homeschooled children in Indiana are in the same catagory as privately schooled children. They are not required (and I've heard, not even allowed... but that's rumor) to take the ISTEP.
Iowa Basics are another test altogether and are administrated in various ways. Parents can administrate them, or support group leaders can give them to an entire support group, or they can be taken in a public school setting. I suggest going to their web site: http://www.uiowa.edu/~itp/itbs.htm and find out the requirements.
The bottom line is: at this time, there are no mandatory testing requirements for homeschooled students in the state of Indiana. Parents might need to know about the status of their child in relation to other children in public schools, but that information is not needed, nor useful for any government agency to track.
~b.b.bennett IHEN Web Services