Proposed Changes to Oregon Tax Rules
The following is a transcript of an interview with paralegal Adriana Pedraza and attorney Jonathan Mishkin. In this interview, they discuss proposed changes to the Oregon tax rules.
Adriana: Thanks for joining Jonathan Mishkin, a trusted expert in tax and tax controversy. I’m your host and Jonathan’s paralegal, Adriana Pedraza. Today Jonathan will talk about proposed changes to the Oregon tax rules. Hi, Jonathan, what do we need to know about these proposed changes?
Jonathan: Thanks, Adriana. Reporting out here from the high desert of Central Oregon, I am excited to announce that in December, I believe it was December 20th, Governor Brown signed a temporary order that is now enlarged the amount of penalties that are now available to request abatement or relief. What I wanted to let you all know is that the following penalties are going to be eligible for this waiver:
- the 5% penalty for failing to file a return
- the 5% penalty for failing to pay
- the 20% penalty for annual returns that are more than three months overdue
- the 25% penalty, following the department’s notice of an overdue return.
This next one I feel is the most important. If you do not file for three years or more in Oregon, when you file there’s normally a 100% penalty. That’s right, the doubling of your amount. This actually, in my opinion, would make certain taxpayers not want to come forward and comply because they were afraid of the size of the balance. I think this is going to encourage more compliance. So, I wanted to point out, if you’re in a situation where you’ve gone more than three years without filing, there’s now a mechanism in place where we can get hopefully around that 100% penalty.
Couple of the other penalties now available for abatement. Normally there’s $100 penalty when you don’t file your transit tax return. So, if you live in the Eugene area, or up in the Portland area, we have a transportation you know, public transportation tax: you can get an abatement on that. You can also get an abatement on the 5% penalty for being late on your quarterly estimated or for a non-qualified withdrawal from a first-time homebuyer savings account.
The real key takeaway is this is a temporary rule. That governor signed it because Governor Brown knew there was a lot of economic distress going on. What is going to happen next is on May 25th, there will be a public hearing to satisfy constitutional due process we call it notice and comment. I’m going to presume that the general public is going to be happy about these abatements. So, I’m hopeful that the governor will make this permanent come the summertime, but it is in effect right now and I highly doubt that people are going to provide negative comments that would potentially change this.
So, in conclusion, I wanted everyone to be aware that your typical penalties for late filing, late payment, three years of unfiled, late estimated; they’re all now in the category of updatable penalties if you have reasonable cause.
Adriana: Sounds good. Thank you for the update, Jonathan. For those of you wishing to learn more, please visit our website at www.jmishkinlaw.com. Thanks!