Well, I survived another brutal tax season, and unfortunately I still have a ton of extended returns to get out in the next week, but the last thing I need is ODR wasting my time with incorrect notices to clients that force me to double and triple check OR PTE calculations. I had to post this really quick in case there is anyone else out there with this scenario:
- Filed an OR 40P Part-Year Resident return for 2015?
- Was Schedule OR-PTE-PY included?
If both apply to you and you have received a letter from ODR with a proposed refund adjustment, then there is a good chance that their adjustment is incorrect – especially if they are proposing a lower tax amount that is equal to the tax on the OR-PTE-PY form, Section B, line 19a multiplied by your Oregon percentage from Form 40P, line 35.
The OR-PTE-PY is new this year, and the worksheet in Section B can be very confusing the first time through, but the most important thing is the the worksheet already multiplies the tax amounts by the Oregon percentage and the Oregon non-passive percentage, so by the time you get to line 19a, it is already pro-rated. For this very reason, ODR lists specific instructions below line 19a “Don’t multiply the tax by the Oregon percentage as instructed on line 48 of the Form 40P.” . However, on the notice I received, they have done just that in their proposed tax number – they have multiplied the amount on line 19a from OR-PTE-PY Section B by the Oregon percentage, which is incorrect. We had even clearly marked box 47c on Form 40P as they requested, but they still made the error.
The thing that frustrated me is that the return was transmitted on 4/14/16 and they had a letter sent out on 4/22/16, which means a machine is likely kicking these out without any manual review and this could result in a large number of erroneous tax refunds. This is a waste of everyone’s time and money, and coupled with the disastrous late release of OTTER 2016, I am starting to think Oregon needs to following Intel’s lead and clean house at ODR and OED.