Straumfjord v. Commission , 3 Or. Tax 69 ( 1967 )

Decision on affirmative defense for plaintiffs rendered May 26, 1967, decision on the merits for defendant rendered July 12, 1967. 1. An assessment notice for additional personal income tax for the year 1963 was sent to plaintiffs on September 21, 1965. The plaintiffs appealed to the tax commission and a hearing was held on July 19, 1966 with plaintiff Agnar Straumfjord and Howard I. Bobbitt, his counsel, present. The tax commission sustained the deficiency assessment and a copy of the opinion and order was sent to plaintiffs' attorney and received by him on July 27, 1966. No copy of the opinion and order was ever served upon or delivered to the taxpayers. The plaintiffs appealed to this court by filing a complaint herein on October 17, 1966. In its answer and affirmative defense the defendant alleged that the plaintiffs' complaint should be dismissed because they did not file in this court within the sixty days provided in ORS314.460(1). This statute requires appeals to this court from the tax commission in cases involving income taxes to be filed "within 60 days after notice by the commission of its determination has been received by the taxpayer, given as provided in ORS 314.455." The latter statute merely states that the commission shall notify the taxpayer of its determination of the amount of tax due.

If the service of the defendant's opinion and order on plaintiffs' attorney is sufficient the complaint must be dismissed because it is conceded that the complaint was not filed in this court within the 60 days allowed by ORS 314.460.

2. Contrary to the procedure in property tax cases where ORS306.805 (with certain exceptions not material) permits service of the commission order on the taxpayer or his attorney, ORS314.455 and 314.460 specifically state that the commission shall notify the taxpayer of its order and the taxpayer may appeal within 60 days after such notice.

The defendant contends the above statutes requiring that notice be given to the taxpayer have been superceded in this case by ORS 314.820 which states:

"No attorney, accountant or agent shall be recognized as representing any taxpayer in regard to any claim, appeal or other matter relating to the tax liability of such taxpayer in any hearing before, or conference with, the commission, or any member or agent thereof, unless there is first filed with the commission a written authorization or unless it appears to the satisfaction of the commission, or member or agent thereof, that the attorney, accountant or agent does in fact have authority to represent the taxpayer."

No written authorization to appear as counsel for plaintiffs was filed with the commission but the opinion and order states that among those present at the hearing before the commission was "Mr. Howard I. Bobbitt, attorney representing the taxpayers."

There is some basis for the defendant's argument that after counsel appeared and represented the plaintiffs at the hearing before the commission the commission was justified in serving counsel with the copy of the opinion and order. On the other hand, by seeking to dismiss plaintiffs' complaint for not having been filed in time, the defendant is taking advantage of its own failure to comply with the statute requiring that notice be given to the taxpayer.

The Oregon Supreme Court stated in McCain v. State Tax Com.,227 Or. 486, 360 P.2d 778, 363 P.2d 775 (1961) that the statutory proceedings by which the court acquires jurisdiction of an appeal from the tax commission should be strictly construed. It is not inconceivable that a taxpayer's counsel who was familiar with the McCain case and with ORS 314.460 could allow his appeal time to expire while he waited for the tax commission to follow the statute and give the notice to the taxpayer.

The defendant's affirmative defense of the statute of limitations is dismissed.