Penalty waivers

What are penalty waivers?

A penalty waiver is a process that allows you to request that all or part of your penalty be waived. Only certain penalties are eligible to be waived.

• 5 Percent Failure-to-File Penalty: This penalty is added to an account when a return has not been filed or reported by the due date (ORS 314.400).
• 5 Percent Failure-to-Pay Penalty: This penalty is added to an account when a tax has not been paid by the due date (ORS 314.400, 321.560).
• Additional 20 Percent Penalty: This penalty is added to an account when a return has not been filed or reported for a period of three or more months after the due date (ORS 314.400, 321.560).
• Additional 25 Percent Penalty: This penalty is added to an account when a return has not been filed or reported within 30 days of receiving a Notice of Assessment letter for failure to file (ORS 314.400).
• 100 Percent Penalty: This penalty is added to an account when required reports or returns have not been filed three consecutive years by the due date of the third year (ORS 305.992).
• 100 Dollar Penalty: This penalty is added to an account when an annual report (Form WR or statewide transit tax annual report) has not been filed by the due date (ORS 316.202).
• 5 Percent Underpayment Penalty: This penalty is added to an account when there has been an underpayment of the quarterly commercial activity estimated tax payment (ORS 317A.161).
• 5 Percent Non-Qualified Withdrawal Penalty: This penalty is added to an account when there has been a nonqualified withdrawal from a first-time homebuyer savings account (ORS 316.801).
• Penalty for Dishonored Checks: This penalty is added to an account when the department has received two or more dishonored payments within the last two years (ORS 305.228).

How do I request a penalty waiver?

Submit your penalty waiver request by logging on to Revenue Online. Alternatively, you can submit penalty waiver requests in writing. Include the following information with your penalty waiver requests:

For penalties assessed on individuals

• Your name
  

• Your Social Security number
  

• Tax year/quarter on which you are requesting the waiver.
  

• Reason you received the penalty. For example, if you filed a return late tell us why.
  

• If applicable, send us documentation to support your request. We may request additional information to determine the type of penalty waiver for which you qualify.

For penalties assessed on businesses

Note: Businesses must be in tax compliance (current on all returns and deposits) to qualify for a penalty waiver.

• Your name (must be an owner, officer, or an individual with a valid Taxpayer Authorization Form on file with the department).
  

• Federal employer identification number (FEIN) or business identification number (BIN) for the business.
  

• Tax program and tax quarter/year on which you are requesting the waiver. 
  

• Reason you received the penalty. For example, if you filed a return late tell us why. 
  

• If applicable, send us documentation to support your request. We may request additional information to determine the type of penalty waiver for which you qualify.
  

How do I know you received my penalty waiver request?

Penalty waiver requests may take anywhere from three to six months to process. Once we process your penalty waiver request, we will send you a Notice of Penalty Waiver Determination letter. This letter will inform you whether we have approved, partially approved, or denied your request.

What if I disagree with the department’s decision?

You can request a conference to provide more information for us to consider, regarding your penalty waiver request. You have 30 days from the date on the Notice of Penalty Waiver Determination letter to request a conference to provide more information.

The decision we make after the conference will be the department’s final decision regarding your penalty waiver request.

Frequently asked questions