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IN THE OREGON TAX COURT MAGISTRATE DIVISION Income Tax HAROLD A. TREINEN, Plaintiff, v. DEPARTMENT OF REVENUE, State of Oregon, Defendant. ) ) ) ) ) ) ) ) ) )

TC-MD 060044C

DECISION

Plaintiff appeals Defendant's Notice of Proposed Refund Adjustment for tax year 2000, pursuant to which Defendant denied Plaintiff's refund of approximately $600. Defendant requests that the court uphold its refund denial because Plaintiff did not file his return within three years of the due date. Trial was held October 4, 2006. Plaintiff appeared on his own behalf. Defendant Department of Revenue (department) was represented by Amy Stalnaker, a department auditor. I. STATEMENT OF FACTS Plaintiff filed his tax year 2000 state income tax return on April 14, 2005, well beyond the applicable due date. The return reported a refund, which Defendant denied because the return was filed more than three years after the due date. Plaintiff has obsessive compulsive disorder (OCD). Plaintiff is receiving individual and group therapy for his condition, which was diagnosed in 1990. Plaintiff is also taking medication for his OCD. At the time of trial, Plaintiff was unemployed and collecting social security disability payments. However, Plaintiff does have a lengthy work history. Plaintiff was employed full-time by a transportation company for 18 years, until the job ended in June 2002. Plaintiff's DECISION TC-MD 060044C 1

duties at that job involved accounting work. Among his duties, Plaintiff reconciled bank accounts and accounts receivable and managed the amortization of prepaid assets. Plaintiff did not reveal his psychiatric condition to his employer. After June 2002, Plaintiff was unemployed for approximately 11 months before he was hired by Oregon Health Sciences University (OHSU) as an accounting specialist for the School of Medicine. The job at OHSU began in June 2003 and ended in May 2005. According to the sworn testimony, Plaintiff is able to pay his bills, although he does have a habit of making his payments on or after the due date. Additionally, Plaintiff's OCD led to the dissolution of his marriage in 1995. II. ANALYSIS Under Oregon law, a refund otherwise due a taxpayer will generally be disallowed if the return is not filed within three years of the due date. The applicable statute is ORS 314.415(1)(b)(A),1 which provides in relevant part: "No refund shall be allowed or made after three years from the time the return was filed * * * , nor shall a refund claimed on an original return be allowed or made in any case unless the return is filed within three years of the due date, excluding extensions, of the return in respect of which the tax might have been credited." Plaintiff's return was filed beyond the three-year refund limitation period set out in the statute, and the requested refund was appropriately denied by Defendant in processing. ORS 314.415(1)(b)(B) does provide an exception to the three-year rule "[i]f a taxpayer would qualify under section 6511(h) of the Internal Revenue Code for a suspension of the running of the periods specified for filing a claim for refund of federal income tax [.]" Internal /// ///
1

All references to the Oregon Revised Statutes (ORS) are to 2003.

DECISION TC-MD 060044C

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Revenue Code (IRC) section 6511 suspends the federal periods of limitation for individuals found to be "financially disabled." The term "financially disabled" is defined in the code as: "an individual * * * [who] is unable to manage his financial affairs by reason of a medically determinable physical or mental impairment of the individual which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months." IRC

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Oregon Law