Oregon rule requiring businesses to electronically file W-2 reports upheld
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Friday, April 5, 2019

Oregon rule requiring businesses to electronically file W-2 reports upheld

By Payroll and Entitlements Editorial Staff

For Oregon personal income withholding tax purposes, the tax court granted the Department of Revenue's summary judgment motion because the department was authorized by statute to promulgate a rule requiring businesses to file W-2 reports and provide substantiation electronically. The department had mailed the taxpayer a notice of a request to file W2s electronically for 2015. However, the taxpayer failed to file its W-2 information electronically within the 30 days of notice and the department issued the taxpayer a notice of special penalty assessment. The taxpayer argued that it timely filed paper copies of its annual W-2 report and the statute did not describe where or how the report is to be filed. Under Oregon law, it is completely within the department’s delegated authority to make such rules and regulations it deems proper to regulate its own procedure and to effectually carry out the purposes for which it is constituted. Further, the penalties are not eligible for waiver under the department’s discretionary authority. The tax court noted that the department established that the taxpayer knowingly failed to file and substantiate its report. Accordingly, the tax court determined that the department has the authority to make rules on how and where reports are to be filed and to impose a penalty against the taxpayer for failing to file and substantiate its annual W-2 report and the penalty was mandatory pursuant to statute. (Cascade Enforcement Agency, Inc. v. Department of Revenue, Oregon Tax Court, No. TC-MD 180103R, March 8, 2019.)

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