OAR 150-305-0480
Returns Not Filed for Three Consecutive Years; 100 Percent Penalty

(1) General requirements. The 100 percent penalty under ORS 305.992 (Civil penalty for failure to file return for three consecutive years) may be imposed if:
(a) The taxpayer was required to file returns for each tax year of three or more consecutive years including returns for tax periods of less than 12 months; and
(b) All returns due during the three-year period are not filed by the due date (including extensions) of the return required for the third consecutive year. Assessments under ORS 305.265 (Deficiency notice)(10) are not returns for the purpose of the penalty under ORS 305.992 (Civil penalty for failure to file return for three consecutive years).
Example 1: On July 1, 2017, Mary filed her Oregon individual income tax returns for 2013, 2014, and 2016. In 2015, Mary was a nonresident and had no Oregon source income. Mary was not required to file an Oregon return for each of three or more consecutive taxable years because she had no Oregon source income in 2015. The 100 percent penalty will not be imposed on the 2013, 2014, or 2016 returns.
Example 2: Assume the same facts as Example 1 except that Mary had income from Oregon sources in 2015 and was required to file a return for 2015 but did not. The requirement that tax returns for three consecutive years were not filed by the due date of the third consecutive year was met and the 100 percent penalty will be imposed on the 2013, 2014, 2015, and 2016 returns.
(2) Under authority granted in ORS 305.229 (When penalties not imposed), the department will not impose the 100 percent penalty under ORS 305.992 (Civil penalty for failure to file return for three consecutive years) for returns filed or a Notice of Assessment that have been assessed a lower failure-to-file penalty.
Example 3: Laurie did not file returns for tax years 2014, 2015, or 2016. In 2016, the department issued Notices of Assessment for tax years 2014 and 2015. The 2014 and 2015 Notices of Assessment reflect a 50 percent failure-to-file penalty under ORS 314.400 (Penalty for failure to file report or return or to pay tax when due). In 2017, the department issues a Notice of Assessment for tax year 2016. The 2016 Notice of Assessment reflects the 100 percent failure-to-file penalty under ORS 305.992 (Civil penalty for failure to file return for three consecutive years). The department will not assess a 100 percent penalty for the Notices of Assessment issued for tax years 2014 and 2015 because a penalty was previously assessed. Thus, the penalty would remain at 50 percent for tax years 2014 and 2015.
Example 4: In November 2016, Hilda filed her 2012 and 2013 tax returns. The department asserted a 25 percent failure-to-file penalty on both the 2012 and 2013 returns. In January 2017, she filed her 2014 and 2015 tax returns. The department asserted the 100 percent failure-to-file penalty on both the 2014 and 2015 returns because the 2012, 2013, and 2014 returns were all filed after the due date for the 2014 return and the 2013, 2014, and 2015 returns were all filed after the due date for the 2015 return. Even though the 2012 and 2013 returns were subject to the 100 percent penalty, the department will not increase the penalty to 100 percent because a lower penalty was previously assessed. Thus, the penalty would remain at 25 percent for tax years 2012 and 2013.
(3) Net tax liability. The penalty is 100 percent of the net tax liability determined for each taxable year. The net tax liability is the tax remaining after subtracting credits, withholding, and other prepayments from the tax required to be shown on the return. A net tax liability may be determined by the taxpayer, an assessment under ORS 305.265 (Deficiency notice)(10), an examination, or audit of a return by the department.
Example 5: On September 27, 2016, Jack filed Oregon income tax returns for 2014 and 2015. The 2015 return showed Oregon tax of $450, state withholding of $700 and a refund of $250. The 2014 return has a net tax liability of $325. Jack was required to file a return for 2013 but did not file a return. Because Jack did not file all returns due during the three-year period by the due date of the 2015 return, the penalty may be assessed on 100 percent of the net tax liability for 2014.
Example 6: Assume the same facts as in Example 5 except that upon examination, the department adjusted the refund claim for 2015 and asserted a deficiency. The penalty may be assessed on 100 percent of the net tax liability for taxable years 2014 and 2015.
Example 7: Assume the same facts as in Example 5 except that the department assessed a tax under ORS 305.265 (Deficiency notice)(10) for 2013. The penalty may be imposed on 100 percent of the net tax liability for each taxable year: 2013, 2014, and 2015.
Example 8: Assume the same facts as in Example 5 except that the department asserted a deficiency one year later for tax year 2015 as the result of an audit. The auditor recomputed Oregon tax to be $1,017. After application of withholding and refunds already received, the taxpayer owed an additional $567 of tax. The 100 percent penalty may be assessed on the net tax liability of $317 for tax year 2015 (the corrected tax of $1,017 less the $700 of withholding) and on the net tax liability of $325 for tax year 2014.
Example 9: Assume the same facts as in Example 5 except that Jack was granted a federal extension to file the 2015 return until October 15, 2016. The 100 percent penalty does not apply. The returns for 2014 and 2015 were filed before the due date of the return required for the third year (October 15, 2016).
(4) Timber tax returns. Timber tax returns are those required to be filed under ORS 321.045 (Payment of tax) and 321.733 (Severance tax returns) (2003). A timber tax return is required to be filed if a taxpayer:
(a) Harvested timber; or
(b) Obtained a Notification of Operations (permit) indicating the taxpayer would harvest. Obtaining a permit will cause the department to generate returns. There does not need to be a harvest to meet the filing qualification because non-harvests require a “NO HARVEST” filing.
Example 10: A taxpayer was required to file returns for 2013, 2014 and 2015 after harvesting timber in each of those years. If all three returns are not filed by January 31, 2016, the 100 percent penalty may be applied to any net tax liability for each of the three years.
Example 11: In 2013 and 2014 a taxpayer obtained permits to harvest; no harvest occurred for either year and the taxpayer did not file returns. In 2015 the taxpayer did not obtain a permit, but harvested timber. If a return is not filed by January 31, 2016, the 100 percent penalty may be applied to the 2015 net tax liability.
(5) Oregon income tax withholding and statewide transit tax payment due dates are determined by the corresponding federal due dates. Generally, income tax withholding and statewide transit tax reports are filed for four quarters per year. The 100 percent penalty will apply if the taxpayer failed to file 12 consecutive quarters representing three consecutive years.
Example 12: After February 1, 2016, an employer filed income tax withholding reports for first through fourth quarter 2015, first through fourth quarter 2014 and first through fourth quarter 2013. The taxpayer is subject to the 100 percent penalty on all of the late reports.
Example 13: On May 30, 2017, an employer files income tax withholding reports for first quarter 2017, fourth quarter 2016, and second quarter 2015. All other quarters have been filed timely. The 100 percent penalty is not assessed because the taxpayer was not delinquent for 12 consecutive quarters (three years).

Source: Rule 150-305-0480 — Returns Not Filed for Three Consecutive Years; 100 Percent Penalty, https://secure.­sos.­state.­or.­us/oard/view.­action?ruleNumber=150-305-0480.

150–305–0010
Requirement for Social Security Numbers 150–305–0014
Applicable Dates 150–305–0016
Electronic Filing 150–305–0018
Acceptance of Cash Payments 150–305–0030
Declaratory Rulings 150–305–0040
Public Notification of Delinquent Taxpayers 150–305–0050
Release of Tax Lien and Clouds on Title 150–305–0052
Release of Lien 150–305–0060
How to Appeal When the Department Denies a Request for Waiver of Penalty or Interest 150–305–0062
Discretionary Penalty Waivers for Information Returns 150–305–0064
Accrual of Interest After Waiver 150–305–0066
Discretionary Waiver of Interest 150–305–0068
Discretionary Penalty Waivers 150–305–0070
Interest Waivers Due to COVID-19 Pandemic Emergency 150–305–0080
Closing Agreements 150–305–0085
Financial Institution Data Match 150–305–0090
Settlement Offer 150–305–0092
Suspended Collection Status 150–305–0094
Cancellation of Liabilities Discharged in Bankruptcy 150–305–0100
Subpoena Issued by the Department 150–305–0110
Disclosure of Confidential Information Provided to the Department of Revenue 150–305–0120
Implied Consent 150–305–0130
When Deduction for Amounts Paid as Wages or Remuneration Permitted 150–305–0140
Interest on Deficiencies and Delinquencies 150–305–0142
Interest on Refunds 150–305–0144
Interest Rate Formula Rule 150–305–0150
Defines Order for Purposes of Interest Rate Increase 150–305–0152
Interest Rate Increase — Jurisdictional Only Appeals 150–305–0160
Penalty for Dishonored Checks 150–305–0170
Representation of Taxpayers before the Department of Revenue 150–305–0180
Designation of Oregon Tax Matters Partner 150–305–0182
Binding Actions of the Tax Matters Partner 150–305–0190
Compromise of a Disputed Liability 150–305–0192
Appeals of Interest Charged on the Underpayment of Estimated Tax 150–305–0194
“Deficiency” Defined 150–305–0196
Notices of Deficiency and Assessment Mailed When Authorization to Represent Signed 150–305–0198
Reopening an Audit 150–305–0200
Adjustments Included in Deficiency Notice When Federal Audit Report Received 150–305–0202
Language Used to Request a Conference or File Written Objections 150–305–0204
Conferences: Purpose and Procedure 150–305–0206
Written Objections: Procedures 150–305–0208
Assessing Tax on Failure to File 150–305–0210
Last Known Address 150–305–0212
Interest on Deficiency 150–305–0214
Penalties 150–305–0216
Appeal from a Notice of Deficiency: Periods of Limitation 150–305–0218
Waiver of a Conference or Written Objection 150–305–0230
Claim for Refund 150–305–0232
Notices of Proposed Refund Adjustment Mailed When Authorization to Represent Signed 150–305–0234
Written Objections to a Proposed Refund Adjustment 150–305–0236
Date of Notice 150–305–0238
Audit Period for Refunds Issued without Examination 150–305–0240
Proposed Refund Adjustment 150–305–0260
Relief for Subsequent Tax Years 150–305–0270
Beneficial Ownership 150–305–0272
Cancellation of Doubtful Liabilities 150–305–0274
Refund of Penalty and Interest 150–305–0276
Appeal Time Frame 150–305–0290
Concurrent Appeals 150–305–0300
“Methods of Collection” Defined 150–305–0302
Contracts Requiring Certificate of Compliance with Oregon Tax Laws 150–305–0304
Certificate of Compliance With Oregon Tax Laws 150–305–0306
Circumstances Not in Violation of Oregon Tax Laws 150–305–0308
Annual Certification Requirement 150–305–0320
Mediation 150–305–0330
Appeal Procedures 150–305–0340
Stay of Collection: When Collection Action Won’t Be Stayed 150–305–0350
Offset of State Debt Through U.S. Treasury Offset Program 150–305–0360
Rules Application 150–305–0362
Appearance Procedure — Local Taxes Administered by the Department of Revenue 150–305–0370
Use of Checkoff Resources 150–305–0380
Application and Signature Due Dates 150–305–0390
Certification of Nonprofit Entities for Instruction Listing 150–305–0392
Definitions of the Terms “Affiliated and “Central Office” 150–305–0394
Signatures Must Be on Department’s Form 150–305–0396
Signature Gathering Period 150–305–0410
Charitable Checkoff Financial Reporting Requirements 150–305–0420
Costs of Administration 150–305–0430
Method of Distribution from Check-off Contributions and Reimbursement of Administrative Expenses 150–305–0450
Depositing Refunds into College Savings Account 150–305–0460
Verification of Returns, Statements, or Documents Filed Under Tax Law 150–305–0470
Date When Writing or Remittance Deemed Received by Department of Revenue 150–305–0480
Returns Not Filed for Three Consecutive Years
Last Updated

Jun. 8, 2021

Rule 150-305-0480’s source at or​.us