The department must refund penalty and interest when it has been determined that it has been paid but was not legally due. Interest must be computed on the amount of tax plus penalty and interest not legally due. The interest starting date must be 45 days after the date the deficiency was paid or 45 days after the return was filed, whichever is later.

Example 1: The taxpayer files a delinquent return and pays the tax, penalty and interest due. Subsequently, it is determined that the taxpayer is not required to file an Oregon income tax return. The amount of tax, penalty and interest paid must be refunded and interest computed on the entire amount beginning 45 days after the date the return was filed.

Example 2: The taxpayer pays the tax, penalty and interest based on a Notice of Assessment. The assessment is subsequently determined to be erroneous. The amount of tax, penalty and interest paid must be refunded and interest computed on the entire amount beginning 45 days after the date the assessment was paid.

Example 3: The taxpayer files a delinquent return and pays the tax, penalty and interest due. Subsequently, the taxpayer amends the return to claim a refund from a net operating loss carryback. The penalty and interest paid with the delinquent return will not be refunded since this amount was legally due.

Statutory/Other Authority

ORS 305.100

Statutes/Other Implemented

ORS 305.295

History

REV 72-2017, amend filed 12/22/2017, effective 01/01/2018
Renumbered from 150-305.295(4), REV 46-2016, f. 8-13-16, cert. ef. 9-1-16
RD 12-1990, f. 12-20-90, cert. ef. 12-31-90