Brumbaugh v. Dept. of Rev.

• Court: Oregon Tax Court
• Decided: April 11, 2023
• Docket: TC-MD 230036R
• Status: Unpublished

Opinion

IN THE OREGON TAX COURT MAGISTRATE DIVISION Income Tax

ANNIE M. BRUMBAUGH, ) ) Plaintiff, ) TC-MD 230036R ) v. ) ) DEPARTMENT OF REVENUE, ) State of Oregon, ) ) Defendant. ) DECISION

This matter is before the court on Plaintiff’s appeal of a Notice of Proposed Refund

Adjustment dated October 3, 2022, for the 2021 tax year. Plaintiff filed her Complaint on

January 30, 2023, requesting a refund of $111 and an award of her $50 court filing fee.

Defendant agreed to Plaintiff’s request for a refund but opposed her request for an award of costs

and disbursements.

I. STATEMENT OF FACTS

The following facts are derived from the Complaint and attachments thereto, the Answer,

and the parties’ declarations in support of and in opposition to an award of costs and

disbursements.

Plaintiff filed an OR-40-N tax form with Defendant for the 2021 tax year. On line 12F of

the form, Plaintiff intended to report a negative number for “[b]usiness income or loss from

federal Schedule 1, line 3” by placing a minus sign to the left of the number, but outside the nine

boxes provided by the form (not including cents):

DECISION TC-MD 230036R 1 Plaintiff’s representative searched for instructions on Defendant’s website and other

websites to determine the proper way to present a negative number on the tax return but was

unable to find any guidance. Plaintiff also attached her federal tax return to her Oregon return.

Defendant’s scanning system did not recognize the number on line 12F of Plaintiff’s

return as negative, and instead recorded the number as positive. As a result, Defendant

determined that Plaintiff’s return should be adjusted and mailed Plaintiff a Notice of Proposed

Refund Adjustment dated October 3, 2022 (Notice). The Notice advised Plaintiff of two options

to appeal to the Department of Revenue: appeal by written objection or request a conference. To

be timely, either of those options must have been completed “within 30 days” of the Notice.

(Compl at 6 (emphasis in original).) The Notice also states:

“Appeal to the Oregon Tax Court.

“* * * * *

“If you didn’t submit a written objection or request a conference, you must file your appeal within 120 days of the date of our original notice * * *.”

(Id.)

Plaintiff’s representative and tax preparer was away from his residence from October 6,

2022, to December 14, 2022. On December 15, 2022, Plaintiff provided the Notice to her

representative. Plaintiff’s representative contacted Defendant and was told that filing an

untimely written objection was “worth a chance.” Defendant received Plaintiff’s untimely

written objection on December 27, 2022. Plaintiff’s representative called Defendant on January

4, 2023 and was told that “the untimely objection letter had been received and was being

processed.” Plaintiff’s representative contacted Defendant about the objection on January 26,

2023 and was told that “the appeal was still processing.” Plaintiff filed her appeal on January 30,

2023.

DECISION TC-MD 230036R 2 II. ANALYSIS

The only issue is whether to grant Plaintiff costs and disbursements of $50 for her filing

fee. The Magistrate Division has discretionary authority under ORS 305.490 to award costs and

disbursements to the prevailing party. 1 Wihtol v. Dept. of Rev., 21 OTR 260, 267 (2013). There

is no question that Plaintiff is the prevailing party because Defendant agreed to the refund the

amount demanded in the Complaint. The question is whether the court should exercise its

discretion to award costs by ordering Defendant to pay Plaintiff for her filing fee. In exercising

its discretion, this court is not bound to consider any specific factors. See Wihtol v. Multnomah

Cty. Assessor, TC-MD 120762N, WL 274126 at *5 (Or Tax M Div Jan 24, 2014). “This court

has previously considered as relevant whether the inaccurate assessment was due to the

taxpayer’s failure to file an accurate return or failure to take advantage of available

administrative review by responding to requests for information.” Kloenne v. Dept. of Rev., TC-

MD 190226N, WL 3312443 at *1 (Or Tax M Div July 23, 2019). “In such cases, the court may

decline to award costs and disbursements.” Id.

In Plaintiff’s favor, the court observes that Defendant does not appear to provide

instructions on how to report a negative number. However, there are several factors in

Defendant’s favor. First, Plaintiff’s use of a negative number outside of the boxes provided on

line 12F appears improper. It seems apparent to the court that the boxes Plaintiff used on the

Form OR-40-N are provided and intended to be the location for data—both numbers and

negative signs included. 2 It is reasonable that data placed outside the boxes could be

1 The court’s references to the Oregon Revised Statutes (ORS) are to 2019. 2 The court is aware, having seen hundreds of forms in litigation, that not all tax forms include the type of boxes found on Plaintiff’s version of Form OR-40-N. The court takes no position as to whether a negative number on a tax return should be noted by using a minus sign or parentheses. Formatting appears to be form specific.

DECISION TC-MD 230036R 3 disregarded. Second, and more importantly, Plaintiff bears responsibility for delay in bringing

an administrative appeal with Defendant. Although Plaintiff’s representative and tax preparer

was not available, Plaintiff offered no reason why Plaintiff herself could not have responded to

Defendant’s Notice in a timely fashion. It appears to be Plaintiff’s delay in filing her

administrative appeal that caused Defendant’s insufficient time to respond and led to this appeal.

III. CONCLUSION

Upon careful consideration, the court declines to award Plaintiff costs and disbursements.

Now, therefore,

IT IS THE DECISION OF THIS COURT that, as agreed upon by the parties, Defendant

shall issue a refund to Plaintiff in the sum of $111 for the 2021 tax year.

IT IS FUTHER DECIDED that Plaintiff’s request for costs is denied.

Dated this _____ day of April 2023.

RICHARD DAVIS MAGISTRATE

If you want to appeal this Decision, file a complaint in the Regular Division of the Oregon Tax Court, by mailing to: 1163 State Street, Salem, OR 97301-2563; or by hand delivery to: Fourth Floor, 1241 State Street, Salem, OR.

Your complaint must be submitted within 60 days after the date of this Decision or this Decision cannot be changed. TCR-MD 19 B.

This document was signed by Magistrate Richard Davis and entered on April 11, 2023.

DECISION TC-MD 230036R 4