ORS 305.295¹
Cancellation of tax, penalty or interest
  • rules

(1) Notwithstanding ORS 305.265 (Deficiency notice) (14), the Department of Revenue may in its discretion, cancel any tax, penalty or interest or any portion thereof, for which an assessment has become final, if any of the following conditions exist:

(a) The assessment is based upon an asserted tax deficiency calculated upon income that the state is expressly prohibited from taxing under the Oregon Constitution or the laws of the United States.

(b) The assessment is based upon an asserted tax deficiency arising from an error made by the department when reviewing the return during processing, and the information necessary to correct the error was properly reported in the return as filed as determined by the department.

(c) The assessment is against an employer for withholding tax, with respect to any full calendar quarter during which the employer had no payroll and had permanently ceased doing business. An employer shall not be considered to have ceased doing business if the employer has changed its name and the business activity continues under the same beneficial ownership.

(d) Pursuant to rules adopted by the department, the department determines that:

(A) Reasonable doubt exists as to the taxpayer’s liability for the assessment;

(B) The taxpayer has presented documentation that the department considers sufficient to support canceling the tax, penalty or interest, or any portion thereof; and

(C) The taxpayer has complied with all applicable reporting and filing requirements for all tax years for which the department maintains records.

(2) When taxes are canceled, in whole or in part, under subsection (1) of this section, the department shall make an order canceling the tax, penalties and interest. The order shall be filed in the records of the department. Upon making the order, the department also shall cause to be canceled or released any lien of record in the counties which may have been filed and entered therein.

(3) Before the department may cancel an assessment under subsection (1) of this section, the taxpayer to whom the assessment is issued shall provide any information the department deems necessary to verify the existence of one of the conditions under which the assessment may be canceled.

(4) Notwithstanding ORS 314.415 (Refunds), the department may refund any payments made with respect to an assessment described in subsection (1) of this section. Interest shall be paid at the rate established under ORS 305.220 (Interest on deficiency, delinquency or refunds) for a period beginning on the date the taxpayer requests the refund.

(5) A taxpayer may appeal denial of a request for cancellation of assessment or refund to the Director of the Department of Revenue. The decision of the director is final and may not be appealed. [1987 c.758 §16; 1997 c.100 §1; 2017 c.278 §6]

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); 48 WLR 147 (2011)

1 Legislative Counsel Committee, CHAPTER 305—Administration of Revenue and Tax Laws; Appeals, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors305.­html (2019) (last ac­cessed May 16, 2020).
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2019, Chapter 305, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano305.­html (2019) (last ac­cessed May 16, 2020).
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