2021 Oregon Revised Statutes
Chapter 305 - Administration of Revenue and Tax Laws; Appeals
Section 305.265 - Deficiency notice; payment of deficiency; assessment; appeal; interest; rules.


(2) As soon as practicable after a report or return is filed, the department shall examine or audit it, if required by law or the department deems such examination or audit practicable. If the department discovers from an examination or an audit of a report or return or otherwise that a deficiency exists, it shall compute the tax and give notice to the person filing the return of the deficiency and of the department’s intention to assess the deficiency, plus interest and any appropriate penalty. Except as provided in subsection (3) of this section, the notice shall:
(a) State the reason for each adjustment;
(b) Give a reference to the statute, regulation or department ruling upon which the adjustment is based; and
(c) Be certified by the department that the adjustments are made in good faith and not for the purpose of extending the period of assessment.
(3) When the notice of deficiency described in subsection (2) of this section results from the correction of a mathematical or clerical error and states what would have been the correct tax but for the mathematical or clerical error, such notice need state only the reason for each adjustment to the report or return.
(4) With respect to any tax return filed under ORS chapter 314, 316, 317 or 318, deficiencies shall include but not be limited to the assertion of additional tax arising from:
(a) The failure to report properly items or amounts of income subject to or which are the measure of the tax;
(b) The deduction of items or amounts not permitted by law;
(c) Mathematical errors in the return or the amount of tax shown due in the records of the department; or
(d) Improper credits or offsets against the tax claimed in the return.
(5)(a) The notice of deficiency shall be accompanied by a statement explaining the person’s right to make written objections, the person’s right to request a conference and the procedure for requesting a conference. The statement, and an accompanying form, shall also explain that conference determinations are routinely transmitted via regular mail and that a person desiring to have conference determinations transmitted by certified mail may do so by indicating on the form the person’s preference for certified mail and by returning the form with the person’s written objections as described in paragraph (b) of this subsection.
(b) Within 30 days from the date of the notice of deficiency, the person given notice shall pay the deficiency with interest computed to the date of payment and any penalty proposed. Or within that time the person shall advise the department in writing of objections to the deficiency, and may request a conference with the department, which shall be held prior to the expiration of the one-year period set forth in subsection (7) of this section.
(6) If a request for a conference is made, the department shall notify the person of a time and place for conference and appoint a conference officer to meet with the person for an informal discussion of the matter. After the conference, the conference officer shall send the determination of the issues to the person. The determination letter shall be sent by regular mail, or by certified mail if the person given notice has indicated a preference for transmission of the determination by certified mail. The department shall assess any deficiency in the manner set forth in subsection (7) of this section. If no conference is requested and written objections are received, the department shall make a determination of the issues considering such objections, and shall assess any deficiency in the manner provided in subsection (7) of this section. The failure to request or have a conference shall not affect the rights of appeal otherwise provided by law.
(7) If neither payment nor written objection to the deficiency is received by the department within 30 days after the notice of deficiency has been mailed, the department shall assess the deficiency, plus interest and penalties, if any, and shall send the person a notice of assessment, stating the amount so assessed, and interest and penalties. The notice of assessment shall be mailed within one year from the date of the notice of deficiency unless an extension of time is agreed upon as described in subsection (8) of this section. The notice shall advise the person of the rights of appeal.
(8) If, prior to the expiration of any period of time prescribed in subsection (7) of this section for giving of notice of assessment, the department and the person consent in writing to the deficiency being assessed after the expiration of such prescribed period, such deficiency may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period agreed upon.
(9) The failure to hold a requested conference within the one-year period prescribed in subsection (5) of this section shall not invalidate any assessment of deficiency made within the one-year period pursuant to subsection (7) of this section or within any extension of time made pursuant to subsection (8) of this section, but shall invalidate any assessment of interest or penalties attributable to the deficiency. After an assessment has been made, the department and the person assessed may still hold a conference within 90 days from the date of assessment. If a conference is held, the 90-day period under ORS 305.280 (2) shall run from the date of the conference officer’s written determination of the issues.
(10)(a) In the case of a failure to file a report or return on the date prescribed therefor (determined with regard to any extension for filing), the department shall determine the tax according to the best of its information and belief, assess the tax plus appropriate penalty and interest, and give written notice of the failure to file the report or return and of the determination and assessment to the person required to make the filing. The amount of tax shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be lawfully claimed upon the return.
(b) Notwithstanding subsection (14) of this section and ORS 305.280, and only to the extent allowed by rules adopted by the department, the department may accept the filing of a report or return submitted by a person who has been assessed a tax under paragraph (a) of this subsection.
(c) The department may reject a report or return:
(A) That is not verified as required by ORS 305.810;
(B) That the department determines is not true and correct as to every material matter as required by ORS 305.815; or
(C) If the department may impose a penalty under ORS 316.992 (1) with respect to the report or return.
(d) If the department rejects a report or return of a person assessed a tax under paragraph (a) of this subsection, the department shall issue a notice of rejection to the person. The person may appeal the rejection to the magistrate division of the Oregon Tax Court only if:
(A) The report or return was filed within 90 days of the date the department’s assessment under paragraph (a) of this subsection was issued; and
(B) The appeal is filed within 90 days of the date shown on the notice of rejection.
(e) If the person assessed under paragraph (a) of this subsection submits a report or return to the department and appeals the assessment to the tax court, the department may request a stay of action from the court pending review of the report or return. If the department:
(A) Accepts the filing of the report or return, the appeal shall be dismissed as moot.
(B) Rejects the report or return, the stay of action on the appeal shall be lifted.
(f) If the department accepts the filing of a report or return, the department may reduce the assessment issued under paragraph (a) of this subsection. A report or return filed under this subsection that is accepted by the department, whether or not the assessment has been reduced, shall be considered a report or return described in subsection (1) of this section and shall be subject to the provisions of this section, including but not limited to examination and adjustment pursuant to subsection (2) of this section.
(g) The department may refund payments made with respect to a report or return filed and accepted pursuant to this subsection. If the report or return is filed within three years of the due date for filing the report or return, excluding extensions, the refund shall be made as provided by ORS 305.270 and 314.415. If the report or return is not filed within three years of the due date for filing the report or return, excluding extensions, the refund shall be limited to payments received within the two-year period ending on the date the report or return is received by the department and payments received after the date the report or return is received by the department. Interest shall be paid at the rate established under ORS 305.220 from the date the report or return is received by the department to the time the refund is made.
(11) Mailing of notice to the person at the person’s last-known address shall constitute the giving of notice as prescribed in this section.
(12) If a return is filed with the department accompanied by payment of less than the amount of tax shown on or from the information on the return as due, the difference between the tax and the amount submitted is considered as assessed on the due date of the original report or return (determined without regard to any extension of time granted for the filing of the return) or the date the report or return is filed, whichever is later. For purposes of this subsection, the amount of tax shown on or from the information on the return as due shall be reduced by the amount of any part of the tax that is paid on or before the due date prescribed for payment of the tax, and by any credits against the tax that are claimed on the return. If the amount required to be shown as tax on a return is less than the amount shown as tax on the return, this subsection shall be applied by substituting the lesser amount.
(13) Every deficiency shall bear interest at the rate established under ORS 305.220 from the due date of the return to the date of payment. If the return was falsely prepared and filed with intent to evade the tax, a penalty equal to 100 percent of the deficiency shall be assessed and collected. All payments received shall be credited first to penalty, then to interest accrued, and then to tax due.
(14) If the deficiency is paid in full before a notice of assessment is issued, the department is not required to send a notice of assessment, and the tax shall be considered as assessed as of the date which is 30 days from the date of the notice of deficiency or the date the deficiency is paid, whichever is the later. A partial payment of the deficiency shall constitute only a credit to the account of the person assessed. Assessments and billings of taxes shall be final after the expiration of the appeal period specified in ORS 305.280, except to the extent that an appeal is allowed under ORS 305.280 (3) following payment of the tax.
(15) Appeal may be taken to the tax court from any notice of assessment. The provisions of this chapter with respect to appeals to the tax court apply to any deficiency, penalty or interest assessed. [1977 c.870 §3; 1981 c.724 §3; 1982 s.s.1 c.16 §5; 1985 c.266 §4; 1987 c.512 §2; 1989 c.414 §4; 1993 c.726 §4; 1995 c.650 §27; 1995 c.780 §3; 1997 c.99 §§26,27; 1999 c.224 §1; 1999 c.249 §1; 1999 c.532 §1; 2001 c.76 §5; 2001 c.660 §21; 2005 c.94 §19; 2015 c.348 §9; 2017 c.23 §2; 2017 c.278 §5]

Structure 2021 Oregon Revised Statutes

2021 Oregon Revised Statutes

Volume : 08 - Revenue and Taxation

Chapter 305 - Administration of Revenue and Tax Laws; Appeals

Section 305.005 - Definitions.

Section 305.025 - Department of Revenue; organization; planning; seal.

Section 305.035 - Director of Department of Revenue; appointment; confirmation; compensation and expenses; bond.

Section 305.045 - Duties of director.

Section 305.060 - Offices of department; equipment and supplies.

Section 305.063 - Department of Revenue Administration Account; use; limitation.

Section 305.075 - Employees; appointment; duties; compensation and expenses.

Section 305.078 - Authority of Department of Revenue to require fingerprints.

Section 305.081 - Definitions.

Section 305.084 - Financial institution data match system.

Section 305.086 - Delinquent child support obligor.

Section 305.088 - Disclosure of transmission prohibited.

Section 305.091 - Authorized purposes.

Section 305.094 - Rules.

Section 305.100 - Rules; forms.

Section 305.102 - Local budget and property tax law; compliance with constitutional limit; rules.

Section 305.120 - Enforcement of tax laws.

Section 305.125 - Application of administrative rules.

Section 305.127 - Means of providing notice required by department; rules.

Section 305.130 - Department as party to actions involving property subject to certain tax liens; complaint and summons.

Section 305.140 - Power to release real property from certain tax liens.

Section 305.145 - When interest required to be waived; power to waive, reduce or compromise small tax balance or penalty and interest; rules.

Section 305.150 - Closing agreements.

Section 305.155 - Cancellation of uncollectible tax; suspension of collection; filing order; releasing liens.

Section 305.157 - Extending statutory periods of limitation.

Section 305.170 - Complaints concerning tax laws; reports and recommendations to Legislative Assembly.

Section 305.180 - Effect of tax warrant for purposes of out-of-state collection.

Section 305.182 - Filing of warrants for unpaid taxes; release, cancellation and satisfaction.

Section 305.184 - Certificate of outstanding warrants; fee; rules.

Section 305.190 - Subpoenaing and examining witnesses, books and papers; application to tax court for disobeyance of subpoena.

Section 305.192 - Disclosure of books and papers relating to appraisal or assessment of industrial property.

Section 305.193 - Disclosure of tax information to designated persons; rules.

Section 305.195 - Written interrogatories; contents; time and manner of service; answer; objection; order for answer; demand for information by taxpayer; order for information.

Section 305.215 - Conflicting claims for personal income tax items; notice procedure; appeal; evidence as public record.

Section 305.220 - Interest on deficiency, delinquency or refunds; adjustments in rates; rules; computation.

Section 305.222 - Determination of interest rate.

Section 305.225 - Request of assistance by law enforcement agency; disclosure of tax records.

Section 305.228 - Penalty for second dishonored payment of taxes; waiver.

Section 305.231 - Department of Revenue to transfer moneys to Drug Treatment and Recovery Services Fund.

Section 305.239 - Qualifications of persons representing taxpayer; procedure for designating representative; rules.

Section 305.242 - Representation before department or magistrate of designated partnership tax matters; designated tax partner.

Section 305.261 - Department to establish program to assist tax practitioners.

Section 305.262 - Department to establish program dedicating resources to assisting representatives of corporations.

Section 305.263 - Order requiring filing report or return; show cause; contempt; appeal.

Section 305.265 - Deficiency notice; payment of deficiency; assessment; appeal; interest; rules.

Section 305.267 - Extension of time to issue notice of deficiency or assessment.

Section 305.270 - Refund of excess tax paid; claim procedure.

Section 305.275 - Persons who may appeal due to acts or omissions.

Section 305.280 - Time for filing appeals; denial of appeal.

Section 305.286 - Potential refund credit in property tax appeals; conditions; procedure; interest.

Section 305.288 - Valuation changes for residential property substantial value error or for good and sufficient cause.

Section 305.295 - Cancellation of tax, penalty or interest; rules.

Section 305.305 - Procedure where deficiency based on federal or other state audit report; effect of appeal; interest suspension.

Section 305.330 - Tax liability of reorganized business entity.

Section 305.380 - Definitions for ORS 305.385.

Section 305.385 - Agencies to supply licensee and contractor lists; contents; effect of department determination on taxpayer status of licensee or contractor; rules.

Section 305.390 - Subpoenas of records containing information on industrial plant for use to determine value of different industrial plant.

Section 305.392 - Process for limiting scope of third-party subpoena.

Section 305.394 - When industrial plant owner may choose not to produce information sought by subpoena.

Section 305.396 - Protection of confidentiality of industrial property information obtained by subpoena.

Section 305.398 - Disclosure and use of industrial property confidential information obtained by third-party subpoena.

Section 305.400 - Payment of costs of subpoena compliance; determination of costs.

Section 305.403 - Appeal of value of state-appraised industrial property in tax court.

Section 305.405 - Oregon Tax Court; creation; jurisdiction.

Section 305.410 - Authority of court in tax cases within its jurisdiction; concurrent jurisdiction; exclusive jurisdiction in certain cases.

Section 305.412 - Jurisdiction to determine value.

Section 305.418 - When transmitted complaint or petition considered to be filed.

Section 305.419 - Tax, penalty and interest payable before appeal; dispute as to nature of tax; how determined; waiver; refund.

Section 305.420 - Issuance of subpoenas; administration of oaths; depositions.

Section 305.425 - Proceedings to be without jury and de novo; issues reviewable; rules of procedure.

Section 305.430 - Hearings to be open to public; report of proceedings; exception; confidential information.

Section 305.437 - Damages for frivolous or groundless appeal or appeal to delay.

Section 305.440 - Finality of unappealed decision of tax court; effect of appeal to Supreme Court.

Section 305.447 - Recovery by taxpayer of certain costs and expenses upon appeal to Supreme Court.

Section 305.452 - Election and term of judge; vacancy; recommendation of appointees to fill vacancy.

Section 305.455 - Qualifications of judge; inapplicability of disqualification-for-prejudice provision.

Section 305.460 - Salary, expenses, disability and retirement of judge and magistrates.

Section 305.480 - State Court Administrator as administrator and clerk; other personnel; expenses; limitation on activities of personnel.

Section 305.485 - Records.

Section 305.487 - Findings and policy.

Section 305.489 - Considerations in adopting rules.

Section 305.490 - Filing fees; fee waiver or deferral; recovery of certain costs and disbursements; additional recovery for certain taxpayers; disposition of receipts.

Section 305.493 - Fees for transcripts or copies of records.

Section 305.498 - Magistrates; appointment; qualifications; oaths; duties; dismissal; appointment of presiding magistrate.

Section 305.501 - Appeals to tax court to be heard by magistrate division; exception; mediation; conduct of hearings; decisions; appeal de novo to tax court judge.

Section 305.505 - Magistrate division records; statistical reports.

Section 305.560 - Appeals procedure generally; procedure when taxpayer is not appellant; intervention.

Section 305.565 - Stay of collection of taxes, interest and penalties pending appeal; exception; bond.

Section 305.570 - Standing to appeal to regular division of tax court; perfection of appeal.

Section 305.580 - Exclusive remedies for certain determinations; priority of petitions.

Section 305.583 - Interested taxpayer petitions for certain determinations; petition contents; manner and time for filing; classification notice requirements; bond proceed use notice requirements.

Section 305.585 - Local government petitions concerning taxes of another local government under 1990 Measure 5; manner and time for filing.

Section 305.586 - Legislative findings; policy on remedies for misspent bond proceeds.

Section 305.587 - Tax court findings; orders; refunds; bond measure construction; other relief.

Section 305.589 - Judicial declarations; petition by local government; notice; intervention; appeal; remedies; costs.

Section 305.591 - Court determination that 1990 Measure 5 tax limit is inapplicable; collection of tax; appeal; stay denied.

Section 305.610 - Reciprocal recognition of tax liability; actions in other states for Oregon taxes.

Section 305.612 - Reciprocal offset of tax refunds in payment of liquidated debt or certain amounts payable; rules.

Section 305.620 - Collection and distribution of local taxes on income and sales; costs; court review of determinations and orders; appeals.

Section 305.645 - Department of Revenue to provide services to political subdivisions.

Section 305.653 - Multistate Tax Compact.

Section 305.685 - Multistate Tax Commission Revolving Account.

Section 305.690 - Definitions for ORS 305.690 to 305.753.

Section 305.695 - Oregon Charitable Checkoff Commission; qualifications; term; compensation and expenses.

Section 305.700 - Officers; meetings; quorum; director as nonvoting member.

Section 305.715 - Determination of eligibility; certification of entities to be listed on schedule of tax return.

Section 305.720 - Qualification for entity for contributions by checkoff; period of eligibility; reapplication.

Section 305.725 - Application of entity.

Section 305.730 - Financial report of entity.

Section 305.740 - Commission examination for continuing eligibility; disqualification order.

Section 305.745 - Inclusion of eligible entities on schedule of tax return.

Section 305.747 - Administrative expenses; crediting contributions to entities; rules.

Section 305.753 - State Treasurer may solicit donations to eligible entities; department rules.

Section 305.754 - Designation of contribution to political party on income tax return.

Section 305.756 - Oregon Political Party Fund.

Section 305.757 - Payments to treasurers of political parties.

Section 305.758 - Payment to political party considered contribution for purposes of campaign finance regulation.

Section 305.759 - Contribution to political party on income tax return not to be claimed as tax credit.

Section 305.762 - Election for direct deposit of personal income tax refund.

Section 305.792 - Surplus refund donations to education.

Section 305.796 - Election to contribute refund to account in Oregon 529 Savings Network; rules.

Section 305.800 - Taxpayer Advocate.

Section 305.801 - Authority of Taxpayer Advocate to issue order to department.

Section 305.802 - Report to Legislative Assembly.

Section 305.804 - Duty of tax professional to notify department of breach of security.

Section 305.806 - Posting of information about debtors with delinquent tax debt on department website.

Section 305.810 - Verification of return, statement or document filed under tax laws.

Section 305.820 - Date when writing, remittance or electronic filing deemed received by tax officials.

Section 305.822 - Prohibition on state or local tax on Internet access.

Section 305.823 - Local government tax on telephone services prohibited.

Section 305.830 - Collection of fines, penalties and forfeitures; disbursement; cost of collection.

Section 305.842 - Application of Internal Revenue Code to certain property tax laws.

Section 305.850 - Use of collection agency.

Section 305.860 - Statement of rights of taxpayers; distribution.

Section 305.875 - Rights of taxpayer in meeting or communication with department.

Section 305.890 - Right to enter into agreement to satisfy liability in installment payments.

Section 305.895 - Action against property before issuance of warrant prohibited; prerequisites for warrant.

Section 305.990 - Criminal penalties.

Section 305.992 - Civil penalty for failure to file return for three consecutive years.

Section 305.994 - Civil penalties imposed on financial institution.