2011 Oregon Revised Statutes
ORS Volume 8, Chapters 305 - 325
ORS Chapter 316
316.177 Reliance on withholding statement; penalty for statement without reasonable basis.

(1) If an employee does not claim a different number of withholding exemptions for state withholding purposes, the employee shall be entitled to the same number of withholding exemptions as the number of withholding exemptions to which the employee is entitled for federal income tax withholding purposes. If an employee does not claim a different number of withholding exemptions for state withholding purposes, the employer may rely upon the number of federal withholding exemptions claimed by the employee, or authorized or specified under the Internal Revenue Code. If the employee does claim a different number of withholding exemptions for state withholding purposes, the employer shall rely on the number specified on that claim.

(2) If any employee makes a statement for federal income tax withholding purposes which claims more than 10 withholding exemptions, or claims exemption from withholding and the employee s income is expected to exceed $200 per week for both federal and state purposes, or claims exemption from withholding for state purposes but not for federal purposes, and as of the time the statement was made there was no reasonable basis for the statement, the Department of Revenue shall assess and collect from the employee a penalty of $500.

(3) The penalty imposed under this section is in addition to any other penalty imposed by law. Any employee against whom a penalty is assessed under this section may appeal to the tax court as provided in ORS 305.404 to 305.560. If the penalty is not paid within 10 days after the order of the tax court becomes final, the department may record the order and collect the amount assessed without interest in the same manner as income tax deficiencies are recorded and collected under ORS 314.430.

(4) The department may waive all or any part of the penalty imposed under subsection (2) of this section if the income tax liability of the employee for the taxable year is equal to or less than the sum of:

(a) The credits against taxes allowed for purposes of this chapter; and

(b) The payments of estimated tax which are considered payments on account of the tax liability of the employee under ORS 316.579 and 316.583. [1969 c.493 27; 1987 c.293 19; 1987 c.843 20; 1993 c.730 42; 1995 c.650 37]