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INFORMATIONAL MEETING OVERVIEW OF COLLECTION PROCESS |
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TAPES 19 A-B, 20 A |
FEBRUARY 1, 2005 9:00 AM STATE CAPITOL BUILDING
Members Present: Senator Ryan Deckert, Chair
Senator Charles Starr, Vice Chair
Senator Rick Metsger
Senator Floyd Prozanski
Members Excused: Senator Gary George
Witnesses Present: Elizabeth Harchenko, Oregon Department of Revenue
Susan Browning, Oregon Department of Revenue
Staff Present: Paul Warner, Legislative Revenue Officer
Barbara Guardino, Committee Assistant
TAPE 19, SIDE A
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004 |
Chair Deckert |
Calls meeting to order at 9:00 a.m. Introduces issue of Department of Revenue tax compliance and collection process, and an overview of governor’s budget for compliance. Will discuss a number of proposals on Wednesday, and California’s tax compliance program. On Thursday a committee bill will be introduced.
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INFORMATIONAL MEETING |
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040 |
Elizabeth Harchenko |
Directs members’ attention to Department of Revenue information packet (EXHIBIT 1).
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051 |
Harchenko |
Begins presentation with Agency Overview: Mission, pages 4-5. Program History, page 6. 2005-07 Governor’s Balanced Budget, page 7.
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071 |
Harchenko |
Page 8: Personal Income and Corporation Taxes.
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095 |
Harchenko |
Page 9, Services Paid for With Oregon Income Tax Dollars
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099 |
Harchenko |
Page 10, Property Taxes, Projected 2005-2007 Department of Revenue Administration
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116 |
Harchenko |
Page 11: Services Paid for With Oregon Property Tax Dollars |
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Page 12: Cigarette and Other Tobacco Taxes
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125 |
Harchenko |
Page 13: Services Paid for With Oregon Cigarette and Other Tobacco Tax Dollars
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132 |
Harchenko |
Pages 14-15, Other taxes, projected 2005-2007 |
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Page 16, Partnerships, projected 2005-2007
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150 |
Harchenko |
Page 17, Assistance Programs, projected 2005-2007
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165 |
Susan Browning |
Page 18, 2003-07 Agency Business Plan Executive Summary. New this tax season are credit card tax payment, online refund status check and Web site for ORMAP.
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210 |
Sen. Prozanski |
Asks whether credit card payment is an option or mandatory.
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215 |
Browning |
Yes, it is voluntary through a third party.
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222 |
Browning |
Page 19: The Balanced Approach to Healthy Income Tax Programs. Page 20: Income Tax Programs “Our Business is Compliance” – Education, Assistance, Enforcement
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245 |
Chair Deckert |
Asks questions concerning educating people where their dollars go.
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250 |
Browning |
People are not always aware how much tax money goes toward education.
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287 |
Browning |
Continues comments on helping taxpayers comply.
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299 |
Browning |
Page 21: Revenue Flow, Education and Assistance, Enforcement
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313 |
Chair Deckert |
Asks, what percentage doesn’t voluntarily report?
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327 |
Browning |
It’s hard to determine, but about 9% of total dollars.
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335 |
Browning |
Page 22: How Oregon Collects Income Tax Dollars – Personal Income Tax
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347 |
Browning |
Page 23: Quality in Compliance Code of Conduct for DOR employees
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358 |
Browning |
Page 24: Taxpayer Assistance in Revenue’s Offices
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382 |
Chair Deckert |
Asks if DOR has enough employees trained to help with education and compliance.
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391 |
Browning |
DOR emphasizes training, partners with local communities and schools to keep administrative costs low. The training is good but there are still challenges. DOR does not need additional staff.
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434 |
Harchenko |
One challenge for DOR is growing at a rate in which it can absorb the growth. DOR plans classes to train auditors and collectors. DOR is reaching limits of the building, so to add staff would require more space.
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TAPE 20, SIDE A
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030 |
Harchenko |
Concludes comments on how to maximize effectiveness of staff.
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042 |
Browning |
Page 25: How We Work to Improve Compliance – Enforcement
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050 |
Browning |
Page 26: Corporation Excise and Income Tax
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056 |
Chair Deckert |
Asks questions on possible legislation for closing of tax shelters.
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066 |
Harchenko |
Oregon is partnering with other states to learn about use and abuse of tax shelters. California and New York have taken lead in educating the other states, sharing data bases and applications to identify shelter vehicles. Will provide more detail tomorrow.
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091 |
Sen. Metsger |
Comments on the ability of public utility districts to convert tax dollars into profits. PUC regulation allows utilities to collect tax dollars and those dollars never get to the state treasury.
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120 |
Harchenko |
Responds to Metzger’s concerns.
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150 |
Harchenko |
Notes, separate accounting states lose revenue. DOR has spoken with PUC during interim on issue of fair return.
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173 |
Sen. Metsger |
Notes, Sen. Vicki Walker will introduce a bill relating to this issue.
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196 |
Chair Deckert |
PUC Chairman Lee Beyer is working on a draft to address this issue.
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208 |
Browning |
Continues discussion with Program Efficiencies and Effectiveness, Income Tax Programs. Page 28: Processing Center Quick Facts
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225 |
Harchenko |
Property Tax Program: Creating Partnerships Page 30: Policy Direction: A Statewide Partnership
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245 |
Harchenko |
Page 31: Oregon’s Property Tax History. Discusses before and after Measure 5
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267 |
Harchenko |
Pages 32-33: Department Property Tax Functions; County Property Tax Functions
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284 |
Harchenko |
Page 36: Property Tax Quick Facts – centrally assessed and industrial properties
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299 |
Harchenko |
Page 37: Mapping. DOR provides services to 14 counties.
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311 |
Harchenko |
Pages 38-39: Oregon Map Project; Assessors Map Status summary |
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324 |
Harchenko |
Skips tobacco taxes, moves to Policy Issues. Page 44: Policy Option Packages. Governor has recommended giving $1.6 million of additional resources to shut down tax shelters, increase auditing.
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344 |
Chair Deckert |
Asks questions concerning receivables, amnesty program.
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360 |
Harchenko |
Most states have held amnesty programs last 4 years. Issues to consider are whether those dollars would be collected anyway and how much might be generated.
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380 |
Chair Deckert |
Comment, California brought in excess of what was predicted. |
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390 |
Harchenko |
California’s Voluntary Compliance Initiative was a targeted effort toward high income individuals and businesses. They estimated 1/10 of what they collected. Other amnesties have been more general.
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445 |
Harchenko |
Oregon has no sales tax, so focus will be different from other states with sales, property and income taxes. Questions and discussion. |
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TAPE 19, SIDE B
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037 |
Harchenko |
Page 45: Multistate Tax Commission, overview and MTC programs
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065 |
Sen. Prozanski |
Will submit a set of questions from citizens’ tax groups to DOR staff.
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080 |
Chair Deckert |
Asks how the DOR deals with collecting a delinquent account.
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088 |
Browning |
Gives examples of dealing with non-payers. DOR will ask for payment in full. If the taxpayer can’t pay in full, DOR will set up a program. If that doesn’t work DOR will take legal action.
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154 |
Browning |
A taxpayer who misses filing three years in a row is subject to 100% penalty. DOR can waive that if a person comes forward.
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168 |
Chair Deckert |
Spoke with a group of CPAs who say people who don’t file year after year have gotten comfortable with not filing.
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190 |
Browning |
There are heavy ramifications for these non-filers. DOR works with CPAs to bring these people into compliance. DOR does a lot of data-matching with IRS and other sources.
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225 |
Chair Deckert |
Implication is, these non-filers are mainly S-Corporations.
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232 |
Browning |
CPAs have an obligation to ensure compliance. Small businesses have an ability to hide their taxes.
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245 |
Chair Deckert |
Requests data on how often DOR has taken businesses to court.
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257 |
Browning |
Will get this information.
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317 |
Paul Warner |
Legislative Revenue Office has a tax compliance bill prepared.
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327 |
Chair Deckert |
Adjourns meeting at 10:18 a.m. |
Tape Log Submitted by,
Barbara Guardino, Committee Assistant Reviewed by Kim Taylor James
Exhibit Summary:
1. Informational, Department of Revenue, Harchenko, 46 pp.