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A Report from Oregon Dept. of Revenue
Today's show was supposed to conclude with a conversation with Rosemary Hardin, the spokesperson for the Oregon Department of Revenue. However, the show prompted so many calls and blog comments that we didn't get to her. So consider this your online show ending!
Ms. Hardin would have shared information about income tax compliance in Oregon. A 2009 study (pdf) was conducted to estimate the level of Oregon taxpayer compliance, to learn why some Oregonians do not comply with paying taxes and to make recommendations for improving the level of compliance. The study was prompted by the Legislature in 2008. Hardin says:
One of the most significant findings in the report was that there is an estimated revenue gap of about $1.2 billion a year.
When we spoke before the show she explained that the Department is taking steps to narrow the gap. They're making it easier for taxpayers to file and pay taxes electronically with a self-service website. Staff are now working until 7:00 p.m. in order to reach taxpayers at home. The Department is working to improve how it chooses which cases to audit. And lastly, Hardin says, they're striving to be more enforcement-oriented; to be more aggressive with big cases by working closely with the Department of Justice to turn over cases for them to review and prosecute.
Harding says that while there is a whole range of philosophies regarding taxation, paying taxes boils down to two things: a sense of moral obligation and a fear of getting caught cheating.
The revenue gap is not caused by wealthy tax evaders, but rather an accumulation of garden variety taxpayers who either make mistakes on their returns or intentionally do not report earnings from sources such as lottery winnings, interest on investments or "under-the-table" cash payments.