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Licensee Tax Compliance Project - Phase II
Frequently Asked Questions
Q: Does this project cover any other tax programs listed in HB 3082?
This project focuses only on licensees who are subject to withholding tax. Read more about HB 3082.
 
Q: What is tax compliance?
Generally, being in compliance means that you filed all required tax returns and paid your taxes in full or are paying them back on an approved payment plan.
 
For this Phase II project, you're in compliance if you:
  • Filed the required withholding tax returns for the three years (12 quarters) before 2011 (2008, 2009, and 2010); and
  • Paid any tax due in full or are following the terms of an approved payment plan to pay off any withholding tax debts;
Or
  • If you're appealing the tax due, are in bankruptcy, or are in the process of a settlement offer.
Q: What are the compliance statuses for licensees?
There are three compliance statuses for licensees in this project.
 
  • In Compliance. Licensees who have filed tax returns for 2008, 2009 and 2010 and have paid any tax due in full or are following the terms of an approved payment plan.
  • Out of Compliance. Licensees who have filed to file a required return or returns for 2008, 2009 or 2010 or have not paid tax due in full or are not following the terms of an approved payment plan.
  • Unable to Determine. Licensees that have a current occupational or professional license but do not have a current withholding tax account. They are neither in nor out of compliance. Possible reasons for this include but are not limited to:
    • Out of state firms with no Oregon employees (this is what your Board members mentioned at the meeting that I attended)
    • Firms that previously had Oregon employees but do not currently
    • Firms that recently started their business or filing their withholding returns but did not have Oregon employees during tax years 2008, 2009, or 2010.
    • Firms that have employees but they are not reporting them for withholding purposes
Q: What information will you share with my licensing board?
We won't share any of your confidential tax information. We'll only provide the board with the overall compliance rate for each license type.
 
Q: What are the licensing boards' and agency's responsibilities in this project?
Each board and agency agreed to provide us with a list of current licensees.
 
Q: What is the cost to the licensing boards' and agency?
There is minimal cost to the boards and agency. Costs include providing us with an electronic list of their licensees and posting project information on their websites and newsletters.
 
Q: As a licensee, what are my responsibilities?
  • If you're in compliance, you have met your responsibility.
  • If you're not, contact us to find out how to get into compliance (file returns, pay your tax debt, make payment arrangements, etc).
Please note that all tax returns are subject to audit. If you agree to a payment plan but don't make the payments, we will take collection action.
 
Q: How will you administer Phase II?
  • Two licensing boards and one agency are participating:
    • Plumbing Board
    • Board of Architect Examiners
    • Department of Agriculture
  • Each board or agency will provide us with a list of licensees.
  • We will do compliance checks on the licensees who are subject to withholding tax. We'll send letters and informational brochures to all licensees subject to withholding tax to tell them about their tax compliance status, and explain how to get into compliance if they aren't.
Q: Why will you send letters to licensees who are in compliance?
It's an effective way to follow-up with licensees who may have heard about the compliance project through their licensing agency or board. We are creating the opportunity to reach out to taxpayers, just as we use customer service contacts, social media, traditional media, and other outreach efforts. The letters will explain the project, why the licensee's continued compliance is important, and how their tax dollars are spent.
 
The long-term value is in the data we collect from the project. It will help the Legislature decide if making tax compliance a requirement for professional licensure is a viable way of bringing more revenue into the General Fund. It will help us determine if the information-only campaign is effective in changing or sustaining behavior and may be used in other ways.
 
Q: What information will you share with the licensing boards and agency?
We will share only summary statistics, such as baseline compliance rate, total number of returns filed, and total tax dollars paid. We will not share any confidential taxpayer information.
 
Q: How much will this phase cost?
We estimate printing and postage will cost about $5,000. We'll include actual costs in the final report to the Legislature.
 
Q: How much revenue has Phase II brought in so far?
We'll have the final amount in our report to the Legislature in May 2012.
 
Q: Did you hire more employees to conduct these projects?
No.
 
Q: Will you track and analyze the results?
We will compare compliance rates among individual licensees and licensee groups to determine compliance behavior. We are tracking:
  • Every interaction with licensees;
  • How many returns they file;
  • How many payments we receive; and
  • How many payment plans we create.
We will calculate compliance rates at the beginning of the project and compare them to compliance rates at the end of project.
 
Q: Is this project part of your larger strategic compliance effort?
Yes. It fits into the recommendations detailed in our 2009 Tax Compliance Report and the recent Secretary of State's audit of our collection activities. This is a proactive approach to compliance allowing the licensee to contact us to assist them with compliance prior to us applying our standard filing enforcement or collection processes.
 
Q: Do other states make tax compliance a condition of professional or occupational licensure renewal?
Yes. Those states are:
  • California
  • Idaho
  • Illinois
  • Indiana
  • Iowa
  • Maine
  • Minnesota
  • Wisconsin
Q: When will you report to the Legislature?
We will present preliminary findings to the Legislature in February 2012 and the final report by May 31, 2012.