2017 ORS 314.400¹
Penalty for failure to file report or return or to pay tax when due
  • interest
  • limitation on penalty

(1) If a taxpayer fails to file a report or return or fails to pay a tax by the date on which the filing or payment is due, the Department of Revenue shall add to the amount required to be shown as tax on the report or return a delinquency penalty of five percent of the amount of the unpaid tax.

(2) In the case of a report or return that is required to be filed annually or for a one-year period, if the failure to file the report or return continues for a period in excess of three months after the due date:

(a) There shall be added to the amount of tax required to be shown on the report or return a failure to file penalty of 20 percent of the amount of the tax; and

(b) Thereafter the department may send a notice and demand to the person to file a report or return within 30 days of the mailing of the notice. If after the notice and demand no report or return is filed within the 30 days, the department may determine the tax according to the best of its information and belief, assess the tax with appropriate penalty and interest plus an additional penalty of 25 percent of the tax deficiency determined by the department and give written notice of the determination and assessment to the person required to make the filing.

(3) In the case of a report or return that is required to be filed more frequently than annually and the failure to file the report or return continues for a period in excess of one month after the due date:

(a) There shall be added to the amount of tax required to be shown on the report or return a failure to file penalty of 20 percent of the amount of the tax; and

(b) Thereafter the department may send a notice and demand to the person to file a report or return within 30 days of the mailing of the notice. If after the notice and demand no report or return is filed within the 30 days, the department may determine the tax according to the best of its information and belief, assess the tax with appropriate penalty and interest plus an additional penalty of 25 percent of the tax deficiency determined by the department and give written notice of the determination and assessment to the person required to make the filing.

(4) Notwithstanding subsections (2) and (3) of this section, if a taxpayer is required to file a federal income tax return for a period of less than 12 months under section 443 of the Internal Revenue Code, the Oregon personal income or corporate excise or income tax return required to be filed for that period shall be subject to subsection (2) of this section.

(5) If a report or return that is subject to a failure to file penalty described in subsection (2) or (3) of this section is filed before a notice of determination and assessment is issued by the department, the failure to file penalty referred to in subsection (2)(a) or (3)(a) of this section shall be added to the amount of tax shown on the report or return.

(6) A penalty equal to 100 percent of any deficiency determined by the department shall be assessed and collected if:

(a) There is a failure to file a report or return with intent to evade the tax; or

(b) A report or return was falsely prepared and filed with intent to evade the tax.

(7) Interest shall be collected on the unpaid tax at the rate established under ORS 305.220 (Interest on deficiency, delinquency or refunds) for the period the tax remains unpaid.

(8) Each penalty imposed under this section is in addition to any other penalty imposed under this section. However, the total amount of penalty imposed under this section and ORS 305.265 (Deficiency notice) (13) with respect to any deficiency shall not exceed 100 percent of the deficiency.

(9) For purposes of subsections (1) to (3) of this section, the amount of tax required to be shown or that is shown on the report or return shall be reduced by the amount that is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax that is claimed on the report or return. If the amount required to be shown as tax on the report or return is less than the amount that is actually shown as tax on the report or return, this subsection shall be applied by substituting the lower amount.

(10) Notwithstanding subsection (1) of this section, the five percent penalty for failure to file a report or return or pay a tax at the time the tax becomes due may not be imposed if:

(a) The taxpayer pays the full amount of the tax plus accrued interest within 30 days of the date shown on the department’s notice sent to the taxpayer; and

(b)(A) The taxpayer had filed an amended individual tax return or an amended corporate return of income or excise tax accompanied by less than full payment of the tax shown on the return plus accrued interest; or

(B) The department issues a notice of tax deficiency to the taxpayer under ORS 305.265 (Deficiency notice). [1971 c.354 §2; 1975 c.593 §14; 1977 c.870 §41; 1980 c.7 §25; 1981 c.724 §4; 1982 s.s.1 c.16 §7; 1985 c.602 §4; 1987 c.158 §48a; 1993 c.726 §13; 1995 c.780 §5; 1997 c.170 §26; 2005 c.335 §1; 2007 c.322 §1; 2015 c.348 §21; 2017 c.278 §8]

Notes of Decisions

Where no return is filed and deficiency is assessed on “best of in­for­ma­­tion and belief,” assess­ment is not void if best of in­for­ma­­tion is not used by depart­ment, but is merely voidable upon timely filed ap­peal. Arnold v. Dept. of Rev., 12 OTR 69 (1991)

Chapter 314

Law Review Cita­tions

9 WLJ 249 (1973); 5 EL 516 (1975)

1 Legislative Counsel Committee, CHAPTER 314—Taxes Imposed Upon or Measured by Net Income, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ors314.­html (2017) (last ac­cessed Mar. 30, 2018).
 
2 Legislative Counsel Committee, Annotations to the Oregon Revised Stat­utes, Cumulative Supplement - 2017, Chapter 314, https://­www.­oregonlegislature.­gov/­bills_laws/­ors/­ano314.­html (2017) (last ac­cessed Mar. 30, 2018).
 
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.