Oregon Tax Problem Relief Guide: Settle OR Back Taxes

At the federal level, the Internal Revenue Service is responsible for processing individual and business tax returns, issuing refunds and investigating situations involving the underpayment of taxes. Similar to the IRS, the Oregon Department of Revenue (DOR) performs the same functions at the state level. If the DOR determines that you have an outstanding taxes owed, it’s up to you to make sure the situation is resolved. The Department of Revenue has a number of options available to help you eliminate your back taxes owed and you shouldn’t hesitate to reach out for help.

Establishing a Payment Plan

While the Department of Revenue prefers taxpayers to pay their tax bill in full by the filing deadline, the state of Oregon recognizes that this may not always be possible. Taxpayers who need more time to pay may be eligible to enroll in a payment plan. Depending on how much you owe, you can set up a payment plan for 6 to 12 months. You can set up a payment plan by calling the DOR at 503-945-8200 or by enrolling through the online payment portal. If you think you’ll need more than 12 months to pay off your taxes owed, you can contact the Department of Revenue to request an extension. You may need to complete a financial statement before your request can be approved.

Completed financial statements can be mailed to:

Oregon Department of Revenue
PO Box 14725
Salem OR 97309-5018

Settling Oregon Tax Liability

If a payment plan isn’t feasible or the total amount you owe is more than you think you can reasonably pay, you may be able to settle your Oregon taxes owed liability. Negotiating a settlement offer allows you to make a lump sum payment to your tax bill and in exchange, the DOR will wipe out the remaining liability. Settlement offers are not automatically accepted. Generally, you may be able to qualify if you can answer no to the following questions:

1. Do I receive Social Security income, Social Security disability, pension payments, or public assistance?
2. Am I over age 60?
3. Are my total assets worth more than $5,000?
4. Is my only asset my home?
5. Is my taxes owed older than seven years?

Taxpayers who answer “yes” to two or more of these questions are encouraged to call 503-945-8824 to discuss their options.

If you think you may qualify for a settlement offer, you must also meet the following requirements:

• You must not be appealing taxes owed on which the DOR is collecting.
• You must have filed all required Oregon tax returns for all tax years and all tax types.
• You must file and pay all taxes on time for the next three years.
• You must be able to show that you cannot sell assets or borrow against them to pay your taxes owed.
• You must be able to prove that you don’t have enough monthly income or assets to pay your taxes owed in full.
• You must not have filed bankruptcy or be in litigation.

To request a settlement offer, you’ll need to complete a Settlement Offer Application and submit it along with your supporting documentation and a payment totaling 5% of your offer to the Department of Revenue.

Requesting a Penalty Waiver

The Department of Revenue allows taxpayers the right to request a waiver of penalties and interest they were charged as a result of a late filing or nonpayment of taxes owed. While you may be able to get a partial or full reduction of the penalties, the DOR advises taxpayers that it does not normally waive interest except in exceptional circumstances. In order to request a penalty waiver, you’ll need to prove reasonable cause as to why you were unable to pay the taxes due on time.

Our Simple Tax Relief Process