Oregon Denies Income Tax Adjustment Appeal, Imposes Frivolous Claim Penalty

The Oregon Tax Court denied a taxpayer’s appeal of a proposed income tax refund adjustment, and imposed a $3,500 frivolous claim penalty. The taxpayer filed a federal U.S. Nonresident Alien Income Tax Return reporting $254 in federal adjusted gross income, and filed an Oregon income tax return reporting the same income. The Department of Revenue adjusted the taxpayer’s federal adjusted gross income to $79,134 and reduced her refund. The taxpayer appealed, testifying that, as an American citizen, she interpreted the Internal Revenue Code (IRC) to permit her to file as a “nonresident alien individual” and that her wages were not ...