OAR 150-314-0215: Listed Transaction Understatement; Penalty

(1) “Return of the taxpayer” for purposes of this penalty is defined as the original return filed with the department that contains a listed transaction understatement, or the most recent amended return filed with the department that contains a listed transaction understatement. (2) “Net increase in taxable income” for purposes of this penalty is defined as an increase to taxable income or a decrease to a taxable loss. Example 1: Taxpayer files an original 2006 return that contains a listed transaction understatement. Taxpayer amends the 2006 return and makes no changes to the treatment of the listed transaction. The Department, during an audit, discovers a listed transaction understatement on the taxpayer’s return. The listed transaction understatement penalty is based on the net increase in taxable income between the treatment of the listed transaction reported on the amended return and the correct treatment of the listed transaction. Example 2: Taxpayer files an original 2007 return. Taxpayer amends the 2007 return to report the correct treatment of a listed transaction. The listed transaction understatement penalty is based on the net increase in taxable income between the amount of the listed transaction on the original return and the correct treatment of the listed transaction reported on the amended return.