Lemieux v. Dept. of Rev.

DECISION TC-MD 260035R 1
IN THE OREGON TAX COURT
MAGISTRATE DIVISION
Income Tax
FRANCOISE M. LEMIEUX, )
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Plaintiff, TC-MD 260035R
v.
DEPARTMENT OF REVENUE,
State of Oregon,
DECISION	Defendant.
Plaintiff appeals Defendant’s Conference Decision Letter/Notice of Refund Denial dated
November 5, 2025, for the 2021 tax year. A remote trial was held via WebEx on July 30, 2026.
Plaintiff appeared and testified on her own behalf. Tracy Zuniga (Zuniga), auditor, appeared and
testified on behalf of Defendant. Plaintiff’s Exhibits 1 to 10 and Defendant’s Exhibits A to G
were admitted without objection.
Plaintiff seeks an Oregon income tax refund more than three years after the return was
due. Plaintiff asserts that Defendant failed to notify her that she had not timely filed her 2021 tax
return and that equitable principles require Defendant to issue a refund. Defendant argues that
Oregon law prohibits it from issuing a refund because the claim was filed more than three years
after the return’s due date and no tax payments were made within two years before the refund
claim.
Plaintiff raises concerns about whether tax administrators should notify taxpayers when
their records indicate withholding has been received but no return was filed. Those concerns,
however, do not alter the statutory limitation on Defendant’s authority to issue a refund.
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DECISION TC-MD 260035R 2
I. STATEMENT OF FACTS
Plaintiff engaged a CPA to prepare and file her 2021 federal and Oregon income tax
returns. Plaintiff filed for an extension for her federal return, which automatically extended the
deadline to file her Oregon return. Plaintiff’s CPA emailed her completed returns to Plaintiff on
November 21, 2022. (Ptf’s Ex 1 at 3.) Plaintiff testified that she did not see or respond to that
email.
On May 19, 2025, the IRS sent Plaintiff a notice stating, “There is a $5,000.00 credit on
your account, but we haven’t received your tax return.” (Ptf’s Ex 2.) Plaintiff testified that
receipt of this letter was the first time she became aware that her 2021 tax returns had not been
filed. Plaintiff’s 2021 federal tax return was received in June 2025, and she received a federal
income tax refund for that year in September 2025. (Ptf’s Ex 7.) Plaintiff’s 2021 Oregon return
was received on June 18, 2025; however, Defendant did not issue a refund, citing her request as
untimely. (Def’s Ex A at 1, Ex C at 1.)
II. ANALYSIS
The issue is whether Defendant is barred by ORS 314.415(2)(a)1 from refunding a 2021
overpayment to Plaintiff.
A. Three-Year Limitation on Income Tax Refunds
ORS 314.415(2)(a) limits both the time for claiming a refund and the amount that may be
refunded. As relevant here, if the original return is not filed within three years of the return’s due
date, excluding extensions, Defendant may allow or make a refund only of the amounts paid
within two years before the filing of the refund claim.2
1 References to the Oregon Revised Statutes (ORS) are to the 2019 version.
2 ORS 314.415(2)(a) states: “The department may not allow or make a refund after three years from the
time the return was filed, or two years from the time the tax (or a portion of the tax) was paid, whichever period

DECISION TC-MD 260035R 3
The treatment of filing extensions is important to understanding why the IRS allowed
Plaintiff’s refund request and Oregon did not. Federal law takes the filing extension period into
account in determining the amount that may be refunded. Treas Reg § 301.6511(b)-1(b)(1)(i).
Oregon law expressly does not. ORS 314.415(2)(a) provides that, when determining whether an
original return was filed within three years of its due date, extensions are excluded. Thus,
although Plaintiff’s federal refund claim was allowed, her Oregon refund claim was filed after
Oregon’s three-year period had expired.
Under ORS 316.187, amounts deducted from an employee’s wages during a calendar
year are considered part payment of the employee’s tax for that taxable year. Because Plaintiff’s
refund claim is based solely on tax withheld from her wages during 2021, she made no
“payments” for that tax year within two years before filing her June 2025 refund claim.
Accordingly, ORS 314.415(2)(a) bars the requested refund.
B. Equitable Tolling
Although the statutory result is clear, Plaintiff’s equitable concerns are understandable.
First, she notes that the IRS sent her a notice before the refund deadline had expired and argues
Defendant should have done so as well. Defendant knew that payments had been tendered on
her behalf and that she had not filed a return. Zuniga asserts that Oregon would not have known
if Plaintiff had an obligation to file a return, owed money, or was due a refund until she filed her
tax return.
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expires later, unless before the expiration of this period a claim for refund is filed by the taxpayer in compliance
with ORS 305.270. In any case, if the original return is not filed within three years of the due date, excluding
extensions, of the return, the department may allow or make a refund only of amounts paid within two years from
the date of the filing of the claim for refund. If a refund is disallowed for the tax year during which excess tax was
paid for any reason set forth in this subsection, the department may not allow the excess as a credit against any tax
occurring on a return filed for a subsequent year.”

DECISION TC-MD 260035R 4
Defendant’s position may accurately describe its legal obligations, but Plaintiff
understandably questions why, with modern automated tax administration systems, the IRS
notified her of the unfiled return, but Oregon did not. Nevertheless, Plaintiff has identified no
legal requirement that Defendant provide such notice. Plaintiff’s citation to the Taxpayer Bill of
Rights, ORS 305.860 to 305.900, does not create such a requirement or override the legislature’s
specific limitation on Defendant’s authority to issue a refund under the circumstances of this
case. Oregon law does not permit the court to toll the refund limitation period in
ORS 314.415(2)(a) based on equitable grounds. See DeArmond v. Dept. of Rev., 14 OTR 112,
117 (1997), aff’d, 328 Or 60, 968 P2d 1280 (1998) (declining to apply equitable tolling to a tax
refund limitation period); see also United States v. Brockamp, 519 US 347, 354, 117 S Ct 849,
136 L Ed 2d 818 (1997) (holding that federal tax refund limitation periods are not subject to
equitable tolling).
Plaintiff questioned why Defendant provided her with appeal rights if the law ultimately
prohibited payment of her refund. The availability of appeal rights does not imply that a
taxpayer will prevail. Rather, those rights provide a taxpayer an opportunity to challenge
Defendant’s determination and to present evidence and legal arguments to an independent
tribunal. Success is not guaranteed – only the right to challenge the determination is afforded to
taxpayers. Here, after considering Plaintiff’s evidence and arguments, the court concludes that
ORS 314.415(2)(a) bars the requested refund.
Plaintiff also argues that denial of her refund is akin to a 100 percent penalty – the same
percentage penalty Oregon imposes for failing to file required returns for three consecutive years
or for false returns made with intent to evade tax. (Ptf’s Ex 8 at 1); see also ORS 305.992(1),
ORS 314.400(6). The court can see how Plaintiff could view her refund denial as a “penalty,”

DECISION TC-MD 260035R 5
because the economic consequence to her is the loss of the entire claimed refund. Statutory
limitations periods can produce harsh results, but determining the appropriate period in which a
refund may be claimed is a policy judgment entrusted to the legislature.
III. CONCLUSION
Plaintiff’s 2021 Oregon personal income tax return and refund claim were received more
than three years after the return’s due date, excluding extensions. Plaintiff did not make any
payment for tax year 2021 within two years before filing the refund claim. ORS 314.415(2)(a)
therefore bars Defendant from allowing or making the claimed refund. Accordingly,
notwithstanding the equities cited by Plaintiff, the court must deny the appeal. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiff’s appeal is denied.
RICHARD D. DAVIS
MAGISTRATE
To appeal this Decision, file a complaint in the Regular Division of the Oregon
Tax Court. Appeals are accepted by electronic filing; by mail at 1163 State
Street, Salem, OR 97301-2563; and by hand delivery to 1241 State Street, Salem,
OR, Floor 4R.
Your complaint must be submitted within 60 days after the date of this Decision
or this Decision cannot be changed. TCR-MD 19 B.
This document was signed by Magistrate Richard D. Davis and entered on
August 19, 2026.