ORS 314.410
Time limit for notice of deficiency

  • circumstances when claim for refund may be reduced after time limit
  • time limit for refund or notice of deficiency for pass-through entity items

(1)

At any time within three years after the return was filed, the Department of Revenue may give notice of deficiency as prescribed in ORS 305.265 (Deficiency notice).

(2)

If the department finds that gross income equal to 25 percent or more of the gross income reported has been omitted from the taxpayer’s return, notice of the deficiency may be given at any time within five years after the return was filed.

(3)

If the department finds that a return reports or reflects the use of a listed transaction, as defined in ORS 314.307 (Definitions), and that use of that listed transaction results in a deficiency in tax paid, notice of that deficiency may be given at any time within nine years after the return was filed.

(4)

Intentionally left blank —Ed.

(a)

The limitations to the giving of notice of a deficiency provided in this section do not apply to a deficiency resulting from false or fraudulent returns, or in cases where no return has been filed.

(b)

Intentionally left blank —Ed.

(A)

If the Commissioner of Internal Revenue or other authorized officer of the federal government or an authorized officer of another state’s taxing authority makes a change or correction as described in ORS 314.380 (Furnishing copy of federal or other state return or report) (2)(a)(A) and, as a result of the change or correction, an assessment of tax or issuance of a refund is permitted under any provision of the Internal Revenue Code or applicable law of the other state, or pursuant to an agreement between the taxpayer and the federal or other state taxing authority that extends the period in which an assessment of federal or other state tax may be made, then notice of a deficiency under any Oregon law imposing tax upon or measured by income for the corresponding tax year may be mailed within two years after the department is notified by the taxpayer or the commissioner or other tax official of the correction, or within the applicable period prescribed in subsections (1) to (3) of this section, whichever period expires later.

(B)

A notice of deficiency mailed pursuant to this paragraph may assert any adjustment necessary to arrive at the correct amount of Oregon taxable income and Oregon tax liability for the tax year for which the federal or other state change or correction is made.

(c)

If the taxpayer files an original or amended federal or other state return as described in ORS 314.380 (Furnishing copy of federal or other state return or report) (2)(a)(B), the department may reduce any claim for refund as a result of a change in Oregon tax liability related to the original or amended federal or other state return, but may not give notice of a deficiency for an adjustment to Oregon tax liability following the expiration of the applicable period prescribed in subsections (1) to (3) of this section and paragraph (a) of this subsection.

(5)

The tax deficiency must be assessed and notice of tax assessment mailed to the taxpayer or authorized representative, who is authorized in writing, within one year from the date of the notice of deficiency unless an extension of time is agreed upon as prescribed in subsection (7) of this section.

(6)

Notwithstanding other provisions of this section, the period for the assessment of any deficiency attributable to any part of the gain realized upon the sale or exchange of the taxpayer’s principal residence, as provided in section 1034 of the Internal Revenue Code (as in effect prior to the repeal of section 1034 of the Internal Revenue Code by the Taxpayer Relief Act of 1997 (P.L. 105-34)), does not expire prior to the expiration of three years from the date the department is notified by the taxpayer of:

(a)

The cost of purchasing the new residence which the taxpayer claims results in nonrecognition of any part of such gain;

(b)

The taxpayer’s intention not to purchase a new residence; or

(c)

A failure to purchase a new residence within the period prescribed in section 1034 of the Internal Revenue Code (as in effect prior to the repeal of section 1034 of the Internal Revenue Code by the Taxpayer Relief Act of 1997 (P.L. 105-34)).

(7)

If, prior to the expiration of any period of time prescribed in this section for giving of notice of deficiency or of assessment, the department and the taxpayer consent in writing to the notice of deficiency being mailed or deficiency being assessed after the expiration of such prescribed period, notice of such deficiency may be mailed or the deficiency 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.

(8)

In the case of a deficiency attributable to the application to the taxpayer of a net operating loss carryback, notice of such deficiency may be mailed at any time before the expiration of the period within which notice of a deficiency for the taxable year of the net operating loss which results in such carryback may be mailed.

(9)

Notwithstanding the other provisions of this section, if any taxpayer agreed with the United States Commissioner of Internal Revenue or the taxing authority of another state for an extension, or renewals thereof, of the period for giving notices of deficiencies and assessing deficiencies in income tax for any year, the period for mailing notices of deficiencies of tax for such years and the period for filing a claim for refund under ORS 314.380 (Furnishing copy of federal or other state return or report) (2)(b) shall expire on the later of:

(a)

The expiration of an applicable period described in subsections (1) to (8) or (10) of this section; or

(b)

Six months after the date of the expiration of the agreed period for assessing a deficiency.

(10)

Intentionally left blank —Ed.

(a)

Notwithstanding the other provisions of this section and ORS 314.415 (Refunds), the period for claiming a refund or giving a notice of deficiency with respect to an item that is shown or required to be shown on a taxpayer’s return and that is attributable to a pass-through entity does not expire prior to three years from the date of the filing of the pass-through entity return to which the item on the taxpayer’s return relates.

(b)

As used in this subsection, “pass-through entity” means any entity that is recognized as a separate entity for federal income tax purposes, for which the owners are required to report income, gains, losses, deductions or credits from the entity for federal income tax purposes. [1957 c.632 §14 (enacted in lieu of 316.610 and 317.410); 1959 c.212 §2; 1959 c.591 §20; subsection (8) derived from 1959 c.212 §3 and 1959 c.591 §21; 1963 c.509 §2; 1963 c.627 §1 (referred and rejected); 1969 c.405 §1; 1969 c.493 §§88,88a; 1971 c.507 §1; 1977 c.870 §43; 1983 c.162 §53; 1985 c.602 §5; 1993 c.726 §14; 1997 c.100 §3; 1999 c.74 §3; 1999 c.90 §4a; 2001 c.9 §5; 2005 c.54 §1; 2007 c.568 §18]

Source: Section 314.410 — Time limit for notice of deficiency; circumstances when claim for refund may be reduced after time limit; time limit for refund or notice of deficiency for pass-through entity items, https://www.­oregonlegislature.­gov/bills_laws/ors/ors314.­html.

Notes of Decisions

When notice was not mailed to the taxpayer pursuant to ORS 314.410 (4), the department was without power to issue an order on the merits. Dickson v. Dept. of Rev., 5 OTR 315 (1973)

Claim for refund of corporate excise taxes for 1964, filed within one year after corporate taxpayer filed report with Department of Revenue in March 1972 regarding change or correction of its federal taxable income resulting from reorganization, was not barred by statute of limitations. International Health & Life Ins. Co. v. Dept. of Rev., 269 Or 23, 523 P2d 223 (1974)

Where defendant Department of Revenue, after giving plaintiff notice of proposed deficiency, failed to assess deficiency within one year required by this section, but rather, attempted to “start over again” by mailing plaintiff another notice of deficiency and proposed assessment for same deficiencies and tax years, Department of Revenue’s failure to follow procedure requiring deficiency be assessed within one year after notice rendered subsequent assessment invalid. Olympia Brewing Co. v. Dept. of Revenue, 284 Or 669, 588 P2d 30 (1978)

Correction by Internal Revenue Service results in change in tax for state income tax purposes only if made with respect to tax year open for state tax assessment at time correction is made. Swarens v. Dept. of Rev., 320 Or 326, 883 P2d 853 (1994)

State could not recalculate tax for tax year closed to review in order to prevent elective carry forward of tax credit to tax year subject to review. Smurfit Newsprint Corp. v. Dept. of Revenue, 329 Or 591, 997 P2d 185 (2000)

Where, in 2005, taxpayer timely filed amended Oregon tax return for 1999 claiming refund carryback for that year based on change in 2002 tax year to federal tax liability, Oregon statute of limitations authorizes Department of Revenue to issue deficiencies to taxpayer only for year in which federal change occurred. Tektronix, Inc. v. Dept. of Revenue, 20 OTR 468 (2012)

Where taxpayers attempted to carry over net operating loss from past tax year to year that Department of Revenue audited, department may challenge calculations from that past tax year only for purpose of determining taxpayers’ liability in year to which taxpayers carried over net operating loss, even though department is barred from issuing notice of deficiency for that past tax year. Hillenga v. Dept. of Revenue, 358 Or 178, 361 P3d 598 (2015)

314.011
Definitions
314.015
Soccer referees considered independent contractors
314.021
Application of chapter
314.023
Application to partners in domestic partnership and to surviving partners
314.029
Application of Deficit Reduction Act of 1984 (P.L. 98-369) and Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) to personal income tax
314.031
Application of Deficit Reduction Act of 1984 (P.L. 98-369) and Simplification of Imputed Interest Rules of 1985 (P.L. 99-121) to corporate excise and income tax
314.033
Application of federal Tax Reform Act of 1986 (P.L. 99-514)
314.035
Application of Omnibus Budget Reconciliation Act of 1987 (P.L. 100-203), Family Support Act of 1988 (P.L. 100-485) and Technical and Miscellaneous Revenue Act of 1988 (P.L. 100-647)
314.037
Application of P.L. 101-140, Omnibus Budget Reconciliation Act of 1989 (P.L. 101-239) and Omnibus Budget Reconciliation Act of 1991 (P.L. 101-508)
314.039
Application of P.L. 102-2, Comprehensive National Energy Policy Act of 1992 (P.L. 102-486), Unemployment Compensation Amendments of 1992 (P.L. 102-318), Tax Extension Act of 1991 (P.L. 102-227) and Emergency Unemployment Compensation Act of 1991 (P.L. 102-164)
314.041
Application of Revenue Reconciliation Act of 1993 (P.L. 103-66), the Uruguay Round Agreements Act (P.L. 103-465) and P.L. 104-7
314.043
Application of ICC Termination Act of 1995 (P.L. 104-88), P.L. 104-117, Omnibus Consolidated Rescissions and Appropriations Act of 1996 (P.L. 104-134), Small Business Job Protection Act of 1996 (P.L. 104-188), Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193)
314.045
Application of Taxpayer Relief Act of 1997 (P.L. 105-34), Taxpayer Browsing Protection Act (P.L. 105-35), Balanced Budget Act of 1997 (P.L. 105-33), Internal Revenue Service Restructuring and Reform Act of 1998 (P.L. 105-206), Transportation Equity Act for the 21st Century (P.L. 105-178) and Tax and Trade Relief Extension Act of 1998 (P.L. 105-277)
314.047
Application of Tax Relief Extension Act of 1999 (P.L. 106-170) and FSC Repeal and Extraterritorial Income Exclusion Act of 2000 (P.L. 106-519)
314.049
Application of Economic Growth and Tax Relief Reconciliation Act of 2001 (P.L. 107-16) and Job Creation and Worker Assistance Act of 2002 (P.L. 107-147)
314.051
Application of Veterans Benefit Act of 2002 (P.L. 107-330), Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 108-27), Military Family Tax Relief Act of 2003 (P.L. 108-121), Working Families Tax Relief Act of 2004 (P.L. 108-311) and American Jobs Creation Act of 2004 (P.L. 108-357)
314.053
Application of Deficit Reduction Act of 2005 (P.L. 109-171), Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) and Pension Protection Act of 2006 (P.L. 109-280)
314.055
Application of Energy Independence and Security Act of 2007 (P.L. 110-140), Mortgage Forgiveness Debt Relief Act of 2007 (P.L. 110-142), Tax Increase Prevention Act of 2007 (P.L. 110-166) and Tax Technical Corrections Act of 2007 (P.L. 110-172)
314.057
Application of Economic Stimulus Act of 2008 (P.L. 110-185), Heroes Earnings Assistance and Relief Tax Act of 2008 (P.L. 110-245), Food, Conservation, and Energy Act of 2008 (P.L. 110-246), Housing and Economic Recovery Act of 2008 (P.L. 110-289), Emergency Economic Stabilization Act of 2008, Energy Improvement and Extension Act of 2008, Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (P.L. 110-343) and Fostering Connections to Success and Increasing Adoptions Act of 2008 (P.L. 110-351)
314.059
Application of American Recovery and Reinvestment Act of 2009 (P.L. 111-5)
314.061
Application of Consumer Assistance to Recycle and Save Act of 2009 (P.L. 111-32) and Worker, Homeownership, and Business Assistance Act of 2009 (P.L. 111-92)
314.063
Application of Federal Aviation Administration Air Transportation Modernization and Safety Improvement Act (P.L. 111-226), Patient Protection and Affordable Care Act (P.L. 111-148), Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (P.L. 111-192), Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) and Homebuyer Assistance and Improvement Act of 2010 (P.L. 111-198)
314.075
Evading requirements of law prohibited
314.078
Determination of tax credit amounts
314.080
Venue on failure to comply with law
314.085
Taxable year
314.091
Abeyance of tax during periods of active duty military service
314.105
Definitions for ORS 314.105 to 314.135
314.115
Adjustment to correct effect of certain errors
314.125
When adjustment may be made
314.135
Computation
314.140
Adjustment of returns of related taxpayers after reallocation of income or deduction on federal return
314.255
Collection of taxes due after revocation of certification of pollution control facility
314.256
Lobbying expenditures
314.258
Withholding in certain conveyances of real estate
314.260
Taxation of real estate mortgage investment conduits
314.276
Method of accounting
314.280
Allocation of income of financial institution or public utility from business within and without state
314.287
Costs allocable to inventory
314.295
Apportionment or allocation where two or more organizations, trades or businesses are owned or controlled by the same interests
314.297
Election for alternative determination of farm income
314.300
Passive activity loss
314.302
Interest on deferred tax liabilities with respect to installment obligations
314.306
Income from discharge of indebtedness
314.307
Definitions
314.308
Reportable transactions
314.310
Liability of transferee of taxpayer for taxes imposed on taxpayer
314.330
Lien if grantor or other person determined to be owner of trust
314.355
Returns when tax year changed
314.360
Information returns
314.362
Filing return on magnetic media or other machine-readable form
314.364
Authority of department to require filing of returns by electronic means
314.370
Department requiring return or supplementary return
314.380
Furnishing copy of federal or other state return or report
314.385
Form of returns
314.395
Time for payment of tax
314.397
Manner of payment
314.400
Penalty for failure to file report or return or to pay tax when due
314.401
De minimis tax payment not required
314.402
Understatement of net tax
314.403
Listed transaction understatement
314.404
Penalty for failure to report reportable transaction
314.406
Penalty for promotion of abusive tax shelter
314.407
Assessment of taxes owing but not submitted with return
314.410
Time limit for notice of deficiency
314.412
Issuing of notice of deficiency attributable to involuntary conversion
314.415
Refunds
314.417
Unpaid tax or withholding lien at time of assessment
314.419
Foreclosure of lien
314.421
When lien valid
314.423
Status of lien
314.425
Examining books, records or persons
314.430
Warrant for collection of taxes
314.440
Tax as debt
314.466
Audits, deficiencies, assessments, refunds and appeals governed by ORS chapter 305
314.469
Treatment of moneys collected under ORS 314.406
314.505
Estimate of tax liability by corporations
314.515
Installment schedule for payment of estimated tax
314.518
Estimated tax payments by electronic funds transfer
314.520
State agency authority over certain electronic funds transfer payments
314.525
Underpayment of estimated tax
314.605
Short title
314.606
Status of ORS 314.605 to 314.675 when in conflict with Multistate Tax Compact
314.610
Definitions for ORS 314.605 to 314.675
314.615
When allocation and apportionment of net income from business activity required
314.620
When taxpayer is considered taxable in another state
314.625
Certain nonapportionable income to be allocated
314.630
Allocation to this state of net rents and royalties
314.635
Allocation to this state of capital gains and losses
314.640
Allocation to this state of interest and dividends
314.642
Allocation to this state of lottery prizes
314.645
Allocation to this state of patent and copyright royalties
314.647
Policy
314.650
Apportionment of income
314.655
Determination of property factor
314.660
Determination of payroll factor
314.665
Determination of sales factor
314.666
Market for sales in this state
314.667
Additional methods to determine extent of business activity in this state
314.668
Definitions
314.669
Legislative findings
314.671
Qualifying investment contract
314.673
Rules
314.674
Apportionment of broadcasting sales
314.675
Apportionment of net loss
314.695
Application of ORS 314.280 and 314.605 to 314.675
314.698
Treatment of global intangible low-taxed income
314.712
Partnerships not subject to income tax
314.714
Character of partnership income
314.716
Basis of partner’s interest
314.718
Treatment of contributions to partnership
314.720
Treatment of distributions from partnership
314.722
Publicly traded partnerships taxed as corporations
314.724
Information return
314.725
Privilege tax applicable to partnerships
314.726
Application of ORS 314.724
314.727
Disclosure of partnership items to partner
314.731
Definitions
314.733
Requirement to report adjustments from partnership-level audit or administrative adjustment request
314.735
Time limit for notice of deficiency
314.737
Time limit for claim for refund or credit
314.739
Obligation or right of partner to report changes in taxable income or tax liability
314.761
“C corporation” and “S corporation” defined for this chapter and ORS chapters 316, 317 and 318
314.762
Taxation of S corporation
314.763
Taxation of shareholder’s income
314.764
Treatment of distributions by S corporation
314.765
Employee fringe benefits
314.766
Tax on built-in gain
314.767
Tax on excess net passive income
314.768
S corporation or shareholder elections
314.769
Application of sections 1377 and 1379 of Internal Revenue Code
314.770
Disclosure of S corporation items to shareholder
314.771
Recapture of LIFO benefits
314.772
Business tax credits
314.775
Definitions for ORS 314.775 to 314.784
314.778
Composite returns of pass-through entities
314.781
Withholding
314.784
Circumstances when pass-through entity withholding is not required
314.805
Department to administer and enforce laws
314.810
Administering oaths and taking acknowledgments
314.815
Rules and regulations
314.835
Divulging particulars of returns and reports prohibited
314.840
Disclosure of information
314.843
Reporting of information to consumer reporting agency
314.845
Certificate of department as evidence
314.850
Statistics
314.855
Rewards for information
314.865
Use of certain information for private benefit prohibited
314.870
Time for performing certain acts postponed by reason of service in a combat zone
314.991
Penalties
Green check means up to date. Up to date