[Revenews] Oregon Tax Amnesty

[PURKEYPILE Steve]

9/15/09

 

Dear Tax Practitioner:

 

As you may have heard by now, the Oregon Legislature passed a tax amnesty program in their session earlier this year.  The Department of Revenue is well underway in its preparations for the tax amnesty program.  The amnesty period begins in less than three weeks - October 1, 2009 and runs through November 19, 2009.  A media campaign has begun throughout the state and television and print ads will be showing up with increasing frequency.  

 

The purpose of this letter is to get you acquainted with the program, inform you of upcoming deadlines, and the consequences of not participating.  The Department of Revenue considers you to be a vital partner in administering the state's income tax program and we want you to be informed so that you can meet the needs of your clients that may be interested in participating in the amnesty program.

 

Here is how the program works:

1.      Anyone who underreported (or didn't report at all) corporate income or excise taxes, personal income taxes, inheritance tax, trust and estate tax, or transit district (self employment only) taxes for tax years 2007 and before (for inheritance tax: the date of death must be before April 1, 2007) may come forward and report any unpaid tax during the amnesty period. If they do so, and have not received a notice of deficiency or been assessed tax for the particular year in question, they will receive a waiver of all penalties and 50% of the interest otherwise due. 

 

2.      Those wishing to participate must file an amnesty application with the department anytime from October 1 to November 19, 2009. They must file their original or amended tax returns with the department (whichever is applicable) anytime from October 1 to January 19, 2010.  Please remember to write "AMNESTY" on the top of each return.

 

3.      To pay in full, go to the amnesty web page (www.oregontaxamnesty.com) and calculate the interest due and send in payment with the returns. Those who are not able to pay in full should check the box on the application indicating that they wish to enter into a payment plan with the department. A representative will contact the participant to set up the payment plan. 

 

4.      When the participant has paid all of the tax and ½ the interest due, the department will waive any and all penalties, and the other ½ of interest. 

 

5.      Things to remember: 

*        Participants must abide by the deadlines above. A failure to comply with the deadlines will result in the amnesty application being revoked. 

*        Participants must file original or amended returns for all years in which they have underreported tax in order to be eligible for amnesty. 

*        Participants waive their right to appeal or request future refunds of any amounts reported on an amnesty amended or original tax return.

 

6.      Taxpayers that could have filed an original or amended return reporting an additional tax liability under amnesty, but failed to do so, will be subject to an additional 25% penalty on any amount of unpaid tax after amnesty is over.  

 

As mentioned above, www.oregontaxamnesty.com is the focal point for practitioners and participants to obtain information about amnesty. All advertisements will promote this web address and direct people there for more information. The site will contain, among other things: 

*        Information about the program and instructions on how to participate; 

*        Documents (or hyperlinks) such as the amnesty application, the legislation (SB 880), the administrative rule, and tax forms for prior years; 

*        A video is being produced to educate viewers on how to participate in amnesty; 

*        Contact information such as phone numbers, PO Boxes, and email addresses for participants to use for amnesty questions and correspondence; 

*        An interest calculator so that participants can, on their own, calculate the amount of tax and interest (1/2 of normal interest amount) they will owe; 

*        Frequently asked questions are available so that participants and practitioners  can obtain answers to their questions without calling the department 

 

The department is sending out approximately 40,000 letters to certain individuals and entities telling them about the amnesty program.  About half of the letters are being sent to individuals and corporations that we believe should be filing Oregon returns but have not.  The other half of the letters are being sent to certain individuals and corporations that are filing but that are in a category that the department has identified as being particularly susceptible to underreporting tax liabilities.  If one of your clients receives one of these letters, you should be aware that they are simply invitations to participate should they need to.  If you client has properly filed tax returns, our letter tells them they do not need to respond.   

 

The department is taking steps so that amnesty is run efficiently and professionally and yet meets the desired goals of the legislature and the citizens of Oregon. We have built a process to handle the additional workload that we anticipate and yet have backup plans in case more participate than are expected. Nevertheless, we expect call volumes to be high because of the overlapping October 15 extension deadline.  We ask for your patience.  If you have general questions about the amnesty program, check the website for answers or consider sending an email to oregon.taxamnesty at state.or.us <mailto:oregon.taxamnesty at state.or.us>  or prac.revenue at state.or.us <mailto:prac.revenue at state.or.us>  instead of calling.  

 

Thank you for your continued partnership with us.  We look forward to working with you to make this a smooth and beneficial process for everyone participating.  

 

 

Sincerely,

Steve Purkeypile

Personal Income Tax Policy Coordinator 

Oregon Department of Revenue

 

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