Personal Income Tax Collection

What should I do if I have not filed my tax return(s) or paid my taxes? Will I get in trouble?

Contact the Oregon Department of Revenue for assistance at 503-378-4988 (Salem area and outside of Oregon) or 1-800-356-4222 (throughout the rest of Oregon).

A Department of Revenue employee can work with you to resolve your tax debt. Our goal is to educate taxpayers and assist them back in to the stream of taxpaying. If you receive correspondence from the Oregon Department of Revenue, contact the department employee named on the correspondence.

The department is committed to working with you to establish the accurate tax debt owed and to establish acceptable payment arrangements. There are many options available depending on your circumstances.

What are my payment options?

z Payment in full is always accepted. z You can pay your delinquent tax debt with your debit card. We also accept Visa and MasterCard. z We can set up a payment plan. If you can pay off the balance within 12 months, we can set up a plan for you over the phone. The balance is simply divided by 12 to arrive at a monthly payment. The final payment will be an estimate because interest will have continued to accrue. You will need to call for the final payoff balance.

If you cannot pay off the balance within 12 months, you will need to fill out a financial statement. Based on this information, we will make a payment arrangement with you. You will be required to file any missing year’s tax returns. We will review your payment plan on an annual basis. You will also be required to submit a financial statement each year. If a new tax debt occurs while you are on a payment plan, you will need to renegotiate the terms of your payment arrangement with your agent. Please refer to our Web site under Tax Forms for a copy of the Financial Statement (form 150-101-159).

What interest rate am I paying?

The current annual interest rate is 6 percent. An interest period is each full month starting with the day after the due date of the original return. Visit our Web site or call us to order the information circular Interest on Tax You Owe: Computation (150-101-691).

Do I have to pay a penalty?

The Department of Revenue charges a penalty for any late-filed return.

z A 5 percent penalty is charged on any current year tax not paid by the filing deadline. z An additional penalty of 20 percent is charged if you file more than 90 days late from the filing deadline. You will then be charged a total of 25 percent penalty (5% + 20% = 25%). z An additional 25 percent penalty is charged if the Department of Revenue assesses taxes owed and files a return for you. z A 100 percent penalty is charged if you don’t file by the due date, including extensions, for three years in a row. The penalty is for 100 percent of the unpaid tax for each of the three years. If you have been charged a 100 percent penalty, a penalty waiver may be allowed for a portion of the penalty. In order to qualify you must file all delinquent tax returns and pay the tax, interest, and remainder of penalty. Your agent will explain the details. Interest is not included in a penalty waiver request. You must pay interest in full. What is a distraint warrant?

If you do not pay your taxes after receiving a delinquency notice, the Department of Revenue may record (“docket”) a distraint warrant. Once it is recorded in the County Clerk Lien Record, the warrant becomes a judgement, or final decision of a court. A lien is then placed on any real or personal property you now own or may own in the future. A lien is a legal claim against your property. If you sell your property, money from the sale will be used to pay your tax debt. In addition, the department can garnish your wages or bank account to pay your tax debt.

Does a distraint warrant mean I could be arrested?

No. A distraint warrant is not a warrant for the arrest of any individual.

Will a tax lien hurt my credit?

A tax lien is a public notice of debt. It attaches to your property and your rights to property. Once a tax lien is filed, it becomes a matter of public record and may have a negative impact on your credit rating.

Are all distraint warrants docketed with the courts?

No. There are occasions when collection is possible without recording a lien with the county.

What is a garnishment and how does it work?

A garnishment is the taking of property held by others to pay a debt. We may garnish your property in the control of others, such as employers and banks. The Department of Revenue is authorized to continuously garnish up to 25 percent of your disposable earnings to pay delinquent tax debt. If we garnish your wages or other property, you have the right to challenge the garnishment.

What is a settlement offer?

The Department of Revenue may accept a settlement offer when the amount you owe cannot be collected in full and the amount you offer reflects collection potential. We will accept or reject your offer based on your ability to pay and the cost of collection. The goal of the settlement offer is to reach a settlement that is best for you and the department. Acceptance of an offer is intended to give you a fresh start. However, if you do not follow the terms of the offer, collection action can begin again on the full amount you owe. You can get settlement offer forms by calling the Department of Revenue or visiting any of our field offices.

This is not my tax debt. It’s my ex-spouse’s. Why are you billing me?

Most married couples combine their income and file a joint return. When you file a joint return with your spouse, you become jointly and individually liable for any tax due on the return.

This means that if the tax due is not paid by the time the divorce becomes final, you may have to pay it by yourself, even if your spouse earned the income. You may also have to pay it even if your divorce settlement states that your spouse will be responsible for the debt.

However, you may be held harmless if you can show that:

z You did not have knowledge of your spouse’s income and did not benefit from it, or z Your signature was forged or you were forced to sign the return under threat. For more information about divorce and taxes, please refer to our Web site under Publications for the information circular Divorce and Taxes (150-101-629).

Questions?

Telephone: Salem 503-378-4988 Toll-free within Oregon 1-800-356-4222

TTY (hearing or speech impaired; machine only): 503-945-8617 (Salem) or 1-800-886-7204 (toll-free within Oregon).

Americans with Disabilities Act (ADA): This information is available in alternative formats. Call 503-378- 4988 (Salem) or 1-800-356-4222 (toll-free within Oregon).

Asistencia en español. Llame al 503-945-8618 en Salem o llame gratis al 1-800-356-4222 en Oregon.

You can pay your delinquent tax debt with your debit card. We also accept Visa and MasterCard.

150-101-695 (Rev. 3-04)

Comments or questions about this page can be sent to the Webmaster at: [email protected] Please do not e-mail the webmaster tax-related questions. Last revised April 12, 2004.