News Briefings - State Taxes
The following article was taken from the 11/2/2009 issue of State & Local Taxes Weekly.
11/3/09 -- Oregon Department of Revenue issues temporary rule on tax amnesty program
by Harry Markowitz, Esq., Esq. (RIA)
The Oregon Department of Revenue has adopted a temporary rule, OAR § 150-305.100-(C), effective October 15, 2009, and a news release related to the current tax amnesty program that runs from October 1 through November 19, 2009. The rule explains the application process, acceptable installment plans, and details on the post-amnesty penalty. The program will apply to personal income taxes, corporate income and excise taxes, trust and estate income taxes, and Lane and Tri-Met Transit District self-employment taxes. (Oregon News Release, 10/28/2009)
Application process. In order to be eligible for amnesty, a participant must file an application within the amnesty period on a form prescribed by the Department. Applications are due on or before November 19, 2009 and must be complete and signed by the participant(s). Applications that are not complete or received after November 19, 2009, will not be accepted and the participant will not qualify for the amnesty being sought on that application. Amnesty returns can be filed with or after the application but are due no later than January 19, 2010. Amnesty returns that are not complete or are received after January 19, 2010 will not qualify for the amnesty being sought and all amnesty-related waivers of penalty and interest will be disallowed. Disqualified amnesty returns will be processed as if there had been no amnesty program.
Installment payments. Amnesty participants can enter into an installment payment agreement with the Department to satisfy an amnesty liability by making regular monthly, or more frequent, payments over a designated period of time. No agreement may extend beyond May 31, 2011 and participant(s) must satisfy all amnesty liabilities on or by May 31, 2011. If an amnesty participant fails to fully comply with the terms of an installment payment agreement, all amnesty-related waivers of penalty and interest will be disallowed. However, the participant may ask the Department to find that the failure to fully comply with the terms of the installment payment agreement was due to "reasonable cause." "Reasonable cause" exists when the participant exercises ordinary care and prudence in abiding by the terms of the installment agreement but was unable to comply with that agreement due to the participant's individual circumstances. If the Department makes such a finding, the installment payment agreement may resume, notwithstanding the failure to fully comply, subject to further conditions satisfactory to the Department and provided that full payment is received no later than May 31, 2011. Upon a Department finding of "reasonable cause" the participant will remain eligible for the penalty and interest waivers.
Post-amnesty penalty. Generally, the post amnesty penalty will be applied to any unpaid tax that is otherwise due for any tax year or reporting period for which amnesty could be sought and for which: (1) the taxpayer failed to apply (and file a return or report) for amnesty; or (2) the taxpayer filed for amnesty and underreported tax liability on the amnesty return. The Department will not impose the post amnesty penalty when an additional tax liability results from an adjustment made to a return by the Internal Revenue Service unless the service has finally imposed a penalty under Internal Revenue Code Sec. 6662, Internal Revenue Code Sec. 6662A, Internal Revenue Code Sec. 6663 or Internal Revenue Code Sec. 7201. In addition, the Department generally will not impose the post amnesty penalty under the following circumstances including, but not limited to, when an adjustment to a return occurs: (1) based on an arithmetical error or transposition of numbers on a return or schedule; (2) based on an inadvertent error made in calculating a depreciation tax deduction allowed to recover the cost or other basis of certain property allowed under the Internal Revenue Code or the Oregon Revised Statutes; and (3) based on an error or omission of an item of income, deduction or credit that results in an additional tax due that is de minimis.
