Picker v. Dep’t of Revenue

“Where payment of the [disputed] tax, penalty, and interest would be an undue hardship, plaintiff may file an affidavit alleging undue hardship.” ORS 305.419(3).

Taxpayers appealed Oregon Tax Court’s dismissal of an appeal for failure to prepay contested income tax or show an inability to pay because of undue hardship. On appeal, Taxpayers argued that the tax court had the burden to prove there was no undue hardship before it dismissed Taxpayers’ complaint and motion to stay the requirement to pay. The Department of Revenue argued that the burden was on Taxpayers to provide the tax court with additional proof of undue hardship, and they had missed the provided deadline. “Where payment of the [disputed] tax, penalty, and interest would be an undue hardship, plaintiff may file an affidavit alleging undue hardship.” ORS 305.419(3). The Court found that the tax court requested additional evidence from Taxpayers and gave them reasonable time to respond. The Court reasoned that by not responding with more information, Taxpayers were left with the other option: to prepay the assessed income tax. Because Taxpayers had not taken either action, the Court held that the Tax Court was within its rights to dismiss the appeal with prejudice. Affirmed.