Current through Register Vol. 63, No. 9, September 1, 2024
(1) Definitions for
the purposes of ORS 316.177 and this rule:
(a) "Frivolous position" includes, but is not
limited to:
(A) Reference to a spurious
constitutional argument;
(B)
Reliance on a "gold standard" or "war tax" deduction;
(C) An argument that wages or salaries are
not includable in taxable income;
(D) An argument that the Sixteenth Amendment
to the United States Constitution was not properly adopted; or
(E) An argument that "unenfranchised,
sovereign, free men or natural persons" are not subject to the tax
laws.
(b) "Reasonable
basis" includes, but is not limited to:
(A) An
employee filed a withholding statement or exemption certificate for the first
time, and attempted, but failed, to correctly calculate the withholding rate in
accordance with the instructions on the withholding statement or exemption
certificate;
(B) An employee
computed the withholding rate in accordance with the instructions on the
withholding statement or exemption certificate, but due to unforeseen events,
the withholding rate claimed is incorrect. Unforeseen events are events that
could not have reasonably been anticipated and affect the taxpayer's taxable
income or deductions for the tax year;
(C) An employee filed a withholding statement
or exemption certificate because the employee relied upon the advice of an
individual who is qualified to practice law or public accounting in this state
or an individual who is licensed by the State Board of Tax Practitioners and
the employee supplied the individual with complete information connected with
the advice given.
(2) A penalty is assessable against an
employee when:
(a) The employee claims
exemption from withholding and the employee does not meet the exemption
requirements provided in OAR 150-316-0237 and the department has determined
there is no reasonable basis for such a claim; or
(b) The department has determined the
employee's withholding is materially deficient, as defined in OAR 150-316-0290,
and the withholding rate is corrected by notice to the employer and employee
under OAR 150-316-0290.
(3) A penalty shall not be assessed against
an employee who, at the time the withholding statement or exemption certificate
is filed, has a reasonable basis for the withholding statement or exemption
certificate.
(4) A penalty shall be
assessed against an employee filing a withholding statement or exemption
certificate in reliance on a frivolous position or with the apparent intent to
delay or impede the administration of the income tax laws of this
state.
