Chapter 322
AN ACT
SB 175
Relating to tax penalties; creating new
provisions; and amending ORS 314.400 and 314.750.
Be It Enacted by the People of
the State of
SECTION 1. ORS 314.400 is amended to read:
314.400. (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 [a]
the report or return continues for a period in excess of three months after
the due date:
(a)[(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)] (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.
[(b)] (5) [But the]
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 [paragraph
(a)(A) of this subsection] subsection (2)(a) or (3)(a) of this section
shall be added to the amount of tax shown on the report or return.
[(3)] (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;
(b) A report or return
was falsely prepared and filed with intent to evade the tax; or
(c) A false claim was
intentionally filed under ORS 310.635, 310.657 and 310.706.
[(4)] (7) Interest shall be collected on the unpaid tax at
the rate established under ORS 305.220 for each month or fraction of a month,
computed from the time the tax became due, during which the tax remains unpaid.
[(5)] (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
(13) with respect to any deficiency shall not exceed 100 percent of the
deficiency.
[(6)] (9) For purposes of subsections (1) [and (2)] 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.
[(7)] (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.
SECTION 2. ORS 314.750 is amended to read:
314.750. (1) Any
increase in tax by reason of a recapture of LIFO benefits under section
1363(d) of the Internal Revenue Code [(recapture
of LIFO benefits)] shall be payable in four equal installments.
(2)(a) The first
installment shall be paid on or before the due date [(determined without regard to extensions)] for the return of the
tax for the last taxable year for which the corporation was a C corporation and
the three succeeding installments shall be paid on or before the due date [(as so determined)] for the corporation’s
return for the three succeeding taxable years.
(b) For purposes of
this subsection, the due date for returns shall be determined without regard to
extensions.
(3) Notwithstanding ORS
314.400 [(4)] (7), for
purposes of ORS 314.400 [(4)] (7),
interest on each installment that is not paid on or before the date prescribed
under subsection (2) of this section for payment of that installment shall
accrue only from the due date for that installment.
(4) This section applies
in the case of S corporation elections made after December 17, 1987. No refund
or interest shall accrue to any taxpayer on account of the retroactive
application under this subsection.
SECTION 3. (1) The amendments to ORS 314.400 by section
1 of this 2007 Act apply to reports or returns required to be filed on or after
January 1, 2008.
(2) The amendments to
ORS 314.750 by section 2 of this 2007 Act apply to tax years beginning on or
after January 1, 2008.
Approved by the Governor June 11, 2007
Filed in the office of Secretary of State June 13, 2007
Effective date January 1, 2008
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