ORS 305.305¹
Procedure where deficiency based on federal or other state audit report
  • effect of appeal
  • interest suspension

(1) As used in this section, "appeal" means an appeal to the Internal Revenue Service or any federal court or an appeal to another state’s taxing authority or any state court having jurisdiction over the other state’s tax matters that are the subject of the appeal.

(2) If a deficiency is based wholly or in part upon an Internal Revenue Service revenue agent’s report made upon any audit or adjustment of the person’s federal income tax return or upon an audit report of another state’s taxing authority, the following procedures shall apply:

(a) If the person has filed a timely appeal from the deficiency asserted by the service or other state taxing authority, the person may file proof of the appeal with the Department of Revenue. If proof of the appeal is received before the tax is assessed, the deficiency shall be assessed without penalty for failure to pay the tax at the time the tax became due.

(b) If the department assesses the deficiency before receipt of proof of the filing of a timely appeal, the person may file the proof with the department. If the proof is filed after the tax has been assessed with a penalty for failure to pay the tax at the time the tax became due, the penalty shall not be waived.

(3) Notwithstanding any other provision of law, filing of proof of a timely appeal under subsection (2) of this section shall extend the time for filing a complaint or petition with the tax court in accordance with this subsection. The person shall notify the department in writing within 30 days after the appeal is finally resolved. The department shall review the issues raised by the appeal and shall make a determination of the effect upon the person’s state income or excise tax liabilities. The department shall then issue a refund, notice of denial of refund or notice of assessment, as appropriate, to the person. If the person disagrees with the department’s action, the person may file a complaint or petition with the tax court within 90 days after the date of the department’s action as provided under ORS 305.404 (Oregon Tax Court) to 305.560 (Appeals procedure generally). Notwithstanding ORS 314.835 (Divulging particulars of returns and reports prohibited) or any other law relating to confidentiality, the department may notify the magistrate division of the tax court if proof of a timely appeal is filed with the department or if the department determines that an appeal has been finally resolved.

(4) Except as provided in ORS 314.440 (Tax as debt) (2), when the department receives proof of a timely appeal, the department shall suspend action to collect the deficiency until the issues are resolved.

(5) If interest imposed by the federal government on a federal deficiency or partnership settlement agreement has been suspended under section 6601(c) of the Internal Revenue Code, interest imposed on a corresponding deficiency determined under ORS 305.265 (Deficiency notice) and this section shall also be suspended. The suspension of interest imposed under ORS 305.265 (Deficiency notice) shall be effective as of the date the federal interest is suspended and for the duration for which the federal interest is suspended.

(6) Except as provided in ORS 314.415 (Refunds) (6), the provisions of this section shall constitute the exclusive remedy of a person whose notice of deficiency is based wholly or in part upon a federal revenue agent’s report or the audit report of another state’s taxing authority. [1989 c.414 §6; 1995 c.650 §29; 1997 c.325 §7; 1999 c.74 §2; 1999 c.90 §28a; 2001 c.660 §17; 2005 c.48 §3]

Notes of Decisions

Where taxpayer does not file good faith peti­tion with Depart­ment of Revenue contesting tax, filing of tax ap­peal with federal agency is insufficient to prevent suspension of occupa­tional license. Sherrer v. Dept. of Revenue, 15 OTR 156 (2000)

Chapter 305

Notes of Decisions

Policy of efficient and effective tax collec­tion makes doctrine of estoppel against govern­ment in tax cases one of rare applica­tion. Pacific Conference v. Dept. of Rev., 7 OTR 429 (1978)

Law Review Cita­tions

9 WLJ 193-260 (1973)

1 Legislative Counsel Committee, CHAPTER 305—Administration of Revenue and Tax Laws; Appeals, https://­www.­oregonlegislature.­gov/­bills_laws/­Archive/­2007ors305.­pdf (2007) (last ac­cessed Feb. 12, 2009).
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2007, Chapter 305, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­305ano.­htm (2007) (last ac­cessed Feb. 12, 2009).
3 OregonLaws.org assembles these lists by analyzing references between Sections. Each listed item refers back to the current Section in its own text. The result reveals relationships in the code that may not have otherwise been apparent. Currency Information