Christensen II v. Dept. of Rev.

No. 9 September 7, 2018 155

IN THE OREGON TAX COURT

REGULAR DIVISION

Charles CHRISTENSEN,

Plaintiff,

v.

DEPARTMENT OF REVENUE

State of Oregon,

Defendant.

(TC 5285)

On cross-motions for summary judgment, the court agreed with the taxpayer

that Oregon’s Taxpayer Bill of Rights requires the director of the Department of

Revenue (the department), or a delegate pursuant to ORS 305.057, to determine

whether an installment agreement the taxpayer had proposed would “facilitate

collection.” See ORS 305.890(1). The court found that the director had failed to

properly delegate his authority before a department employee rejected the tax-

payer’s proposal, and the director’s later delegation did not render the failure

moot. The court also concluded that the department was not required to promul-

gate administrative rules defining the term “facilitate collection” before making

determinations.

Submitted on cross-motions for summary judgment.

Dominic V. Paris, London & Paris, LLP, Portland, filed

the motion and argued the cause for Plaintiff (taxpayer).

James C. Strong, Assistant Attorney General, Department

of Justice, Salem, filed the cross-motion and argued the

cause for Defendant Department of Revenue.

Decision for Plaintiff rendered September 7, 2018.

ROBERT T. MANICKE, Judge.

I. INTRODUCTION

This is the court’s second order in a case of first

impression under Oregon’s Taxpayer Bill of Rights (TBOR).

The first order determined that a claim under the install-

ment agreement provision of the TBOR, ORS 305.890(1), is

within the court’s jurisdiction.1 See Christensen v. Dept. of

1

All references to the Oregon Revised Statutes (ORS) are to the 2015 edition.

Although the tax years at issue in this case are 2009, 2010, 2011, and 2012, the

determination under the TBOR was made in 2015.

156 Christensen II v. Dept. of Rev.

Rev., 22 OTR 384 (2017) (Christensen I). The court then dis-

missed Plaintiff’s (taxpayer’s) original complaint for failure

to state ultimate facts sufficient to constitute a claim, but

granted leave to file an amended complaint pursuant to Tax

Court Rule (TCR) 21 A.

Taxpayer thereafter amended his complaint to

raise five claims, all now before the court on cross-motions

for summary judgment. The first three claims assert that

Defendant Department of Revenue (the department) or its

director failed to act in accordance with ORS 305.890(1)

when the department’s employees considered taxpayer’s

application for an installment agreement. The fourth and

fifth claims assert that the department’s written communi-

cations failed to notify taxpayer of certain rights in compli-

ance with other provisions of the TBOR, ORS 305.860 and

ORS 305.875.

II. FACTS

A. Statutes at Issue

The principal statutes at issue are three provisions

of the TBOR, ORS 305.860, ORS 305.875, and ORS 305.890,

as well as a separate statute relating to persons who may

exercise powers granted to the department’s director (ORS

305.057). All are reproduced below (all emphases added).

ORS 305.057:

“Whenever a power is granted to the Director of the

Department of Revenue, the power may be exercised by

such officer or employee within the Department of Revenue

as designated in writing by the director. Any such designa-

tion shall be filed in the office of the Secretary of State.”

ORS 305.860:

“(1) The Director of the Department of Revenue shall

prepare a statement which sets forth in simple nontechni-

cal terms:

“(a) The rights of a taxpayer and the obligations of the

Department of Revenue during an audit;

“(b) The procedures by which a taxpayer may appeal

any adverse decision of the department, including informal

conferences and judicial appeals;

Cite as 23 OTR 155 (2018) 157

“(c) The procedures for filing and processing refund

claims and filing of taxpayer complaints; and

“(d) The procedures which the department may use in

enforcing the provisions of the laws of this state.

“(2) The statement prepared in accordance with

subsection (1) of this section shall be distributed by the

Director of the Department of Revenue to all taxpayers

upon request. The director shall inform taxpayers of their

rights in a brief explanatory statement included in all bill-

ing or collection notices, all notices of assessment or defi-

ciency and all notices of refund adjustment or denial sent

to the taxpayer.”

ORS 305.875:

“In any meeting or communication with the Department

of Revenue, including but not limited to audits, confer-

ences, interviews and any other meeting or communica-

tion between the taxpayer and the department, the tax-

payer shall have the following rights, unless waived by the

taxpayer:

“(1) The right to an explanation, by an officer or

employee of the department before or during the meeting

of:

“(a) The audit, conference or meeting process and the

taxpayer’s rights under such process; and

“(b) The collection process and the taxpayer’s rights

under such process.

“(2) The right to make an audio recording of any meet-

ing relating to the determination or collection of any tax

with the department representative, using the taxpayer’s

own equipment, and at the taxpayer’s own expense.

“(3) If the department makes an audio recording of the

meeting, the taxpayer has the right to advance notice of the

recording and a copy of the recording upon request. The

taxpayer shall reimburse the department the reasonable

cost of the copy.

“(4) The right to consult with an attorney, certified

public accountant, enrolled agent, or an other person per-

mitted to represent a taxpayer at any meeting before the

department, if the taxpayer clearly states to the department

representative at any time during any meeting, that the

158 Christensen II v. Dept. of Rev.

taxpayer wishes to consult with the person. This subsection

does not apply to a meeting initiated by an administrative

subpoena.

“(5) The right to be represented by anyone who is per-

mitted to represent the taxpayer before the department, as

provided under ORS 305.230 and 305.245.

“(6) The right not to be present, if represented, at the

meeting unless subpoenaed by the department pursuant to

ORS 305.190, or other laws of this state.”

ORS 305.890:

“(1) A taxpayer shall have the right to enter into a writ-

ten agreement with the Department of Revenue to satisfy lia-

bility for payment of any tax in installment payments if the

Director of the Department of Revenue determines that the

agreement will facilitate collection of such liability.

“(2) Except as otherwise provided in this section, any

agreement entered into by the director under this section

shall remain in effect for the term of the agreement.

“(3) The director may terminate any agreement

entered into by the director under this section if:

“(a) Any information that the taxpayer provided to the

director prior to the date the agreement was entered into

was inaccurate or incomplete; or

“(b) The director believes that collection of any tax

to which an agreement under this section relates is in

jeopardy.

“(4) If the director makes a determination that the

financial condition of the taxpayer with whom the director

has entered into an agreement under this section has sig-

nificantly changed, the director may alter, modify or ter-

minate the agreement. Action may be taken by the director

under this subsection only if:

“(a) Notice of such determination is provided to the

taxpayer within 30 days prior to the date of such action;

and

“(b) Such notice includes the reasons why the director

believes a significant change in the financial condition of

the taxpayer has occurred.

Cite as 23 OTR 155 (2018) 159

“(5) The director may alter, modify or terminate an

agreement entered into by the director under this section

in the case of the failure of the taxpayer to:

“(a) Pay any installment at the time such installment

payment is due under such agreement;

“(b) Pay any other tax liability at the time such liabil-

ity is due; or

“(c) Provide a financial condition update as requested

by the director.”

B. Stipulated Facts

The parties stipulated to the following facts:

(1) “On March 17, 2015, following Plaintiff’s failure to

file tax returns, Defendant assessed tax, interest

and penalties for tax years 2009 through 2012.”

(2) “After it issued the assessments, Defendant mailed

various collection notices to Plaintiff, specifically:

1) Notices and Demands for Payment; 2) Distraint

Warrants and 3) Notice of Intent to Offset Federal

Tax Refund.”

(3)

“Each of Defendant’s collection notices included

a document called ‘Your Rights as an Oregon

Taxpayer.’ ”

(4)    “On behalf of Plaintiff, Plaintiff’s attorney submit-

ted a financial statement to Defendant on August 14,

2015, proposing monthly payments of $25 towards

his tax liabilities.”

(5)    “On August 17, 2015, Defendant proposed a monthly

payment of $658 for 12 months. On August 27, 2015,

Defendant proposed that Plaintiff make a monthly

payment of $450. On September 2, 2015, Defendant

mailed a document titled ‘Payment Agreement’ to

Plaintiff for $450 per month for 12 months. Plaintiff

did not enter into the agreement.”

(6)

“The determination as to whether Plaintiff’s

requested installment agreement would facilitate

collection was made by Department of Revenue

employees. The Department’s Director did not

160 Christensen II v. Dept. of Rev.

personally determine whether the requested agree-

ment would facilitate collection.”

(7)    “Prior to considering Plaintiff’s request for an install-

ment agreement, the Director of the Department

did not have a written delegation[2] on file with the

Secretary of State that explicitly referred to install-

ment agreements under ORS 305.890.”

(8)    “Defendant subsequently filed a written delegation

with the Secretary of State on January 14, 2016,

that refers to installment agreements under ORS

305.890.” (“Delegation of Director’s Powers” dated

November 5, 2013, stipulated to have been on file in

August and September 2015 (the 2013 Delegation));

(“Delegation of Director’s Powers” dated January

2016) (the 2016 Delegation).)

(9)    “Defendant has not promulgated regulations setting

forth the criteria to be used in determining whether

an installment agreement will facilitate collection.”

(10)   “On October 9, 2015, Plaintiff appealed Defendant’s

‘Payment Agreement’ to the Magistrate Division of

the Oregon Tax Court.”

C. Proceedings in the Tax Court

In the Magistrate Division, the department moved

to dismiss taxpayer’s complaint for, among other reasons,

lack of subject matter jurisdiction. The magistrate agreed,

concluding that the court lacked subject matter jurisdiction

over collection matters, including requests for installment

agreements under ORS 305.890. That conclusion was in

accordance with prior Magistrate Division decisions.

Taxpayer appealed the magistrate’s decision by fil-

ing a complaint in the Regular Division. The department

then moved to dismiss taxpayer’s complaint for lack of sub-

ject matter jurisdiction and failure to state a claim. The

court denied the department’s motion as to subject matter

2

The parties generally use the term “delegation” to refer not only to the act

of authorizing another department employee to act for the director, but also to the

written “designation” of such employee required to be filed with the Secretary of

State under ORS 305.057.

Cite as 23 OTR 155 (2018) 161

jurisdiction, but granted it as to failure to state a claim,

with leave to amend because this case raises issues of first

impression. Christensen I, 22 OTR at 392-95. Taxpayer’s

amended complaint requests declaratory and injunctive

relief based on the five claims discussed below.

D. Additional Evidence

After filing a stipulation of certain facts, recounted

above, the parties each moved for summary judgment on all

claims. In his opening brief, taxpayer introduced two new

documents, which he did not authenticate, but to which the

department did not object. Taxpayer describes Plaintiff’s

Exhibit 1 as excerpts from a report that the Oregon Society of

Certified Public Accountants submitted to the Oregon House

Revenue and School Finance Committee on February 13,

1989 (the OSCPA Report). The court takes judicial notice of

the entire OSCPA Report as part of the legislative history of

the TBOR, and admits Exhibit 1 into evidence. Taxpayer’s

opening brief also proffered Plaintiff’s Exhibit 2, entitled

“Financial Statement Team Procedural Steps,” as a docu-

ment originating from the department, and the court admits

Exhibit 2 into evidence without objection.

The department did, however, object to the admis-

sion of two unauthenticated exhibits attached to taxpayer’s

reply brief, proffered as Plaintiff’s Exhibits 3 and 4. Taxpayer

did not submit a written response to the department’s objec-

tion, nor did taxpayer respond at oral argument.3 The court

declines to admit proffered Exhibits 3 and 4 into evidence

and does not consider them further.

The department introduced declarations of depart-

ment employees who authenticated two documents enti-

tled “Policy and Administrative Procedure” (PAP), as well

3

Taxpayer supplied no authenticating testimony and did not describe the

nature of the documents, except to state in his reply brief that the department had

produced them during discovery. Taxpayer purports to rely on them as acknowl-

edgments by the department of inconsistent applications of the department’s

procedures. But the documents themselves supply no contextual data (e.g., dates,

authorship, letterhead, explanation of abbreviations and sentence fragments) that

would authenticate them by their own appearance or substance. See OEC 901(2).

Nor are they within any category of self-authenticating documents pursuant to

OEC 902. Without any supporting evidence, such as witness testimony, the court

has no assurance that the documents are what they are asserted to be.

162 Christensen II v. Dept. of Rev.

as screen shots of an online “financial calculator” that the

department uses. Taxpayer did not object to the declara-

tions or to Defendant’s Exhibits A through C, and the court

admits them into evidence.

III. ISSUES

There are five issues in this case, corresponding

with taxpayer’s five claims:

(1) Whether the director failed to follow the delegation

of authority requirements in ORS 305.057 and, by

that failure, violated taxpayer’s right under ORS

305.890(1) to enter into an installment agreement

to pay tax he owed.

(2) Whether the department is required to promul-

gate administrative rules before the director can

apply the term “facilitate collection” when review-

ing applications for installment agreements. ORS

305.890(1).

(3) Whether in 2015 the director then in office erred in

his consideration of certain specific terms that tax-

payer requested in an installment agreement, and

by making a counterproposal that would not “facili-

tate collection.” ORS 305.890(1).

(4) Whether the department failed to notify taxpayer,

in conformance with ORS 305.860, of his right

to appeal the director’s installment agreement

determination.

(5) Whether the department failed to notify taxpayer,

in conformance with ORS 305.875, of his rights

during the collection process, including his right to

an attorney.

IV. ANALYSIS

A. Summary Judgment Standard

The court grants a motion for summary judgment

only if the evidence shows “that there is no genuine issue as

to any material fact and that the moving party is entitled

to prevail as a matter of law.” TCR 47 C. The court reviews

the evidence, as it pertains to each party’s cross-motion, “in

Cite as 23 OTR 155 (2018) 163

a manner most favorable to the adverse party.” Id.; see Two

Two v. Fujitech America, Inc., 355 Or 319, 331, 325 P3d 707

(2014). The moving party is entitled to prevail as a matter of

law only if no “objectively reasonable” factfinder could find

for the adverse party. TCR 47 C.

B. Taxpayer’s First Claim: Delegation of Authority and

Right to Installment Agreement

Taxpayer’s first claim asserts that the department

violated his right under ORS 305.890(1) in 2015 when nego-

tiating with taxpayer because (1) ORS 305.890(1) requires

the “Director of the Department of Revenue” to determine

whether any proposed installment agreement would “facil-

itate collection”; (2) the department’s director then in office

did not personally do so; and (3) the 2013 Delegation then on

file with the Secretary of State failed to delegate authority,

in a manner complying with ORS 305.057, to the depart-

ment personnel who evaluated taxpayer’s initial offer and

who prepared and presented the department’s counter-

offers. ORS 305.057 provides that a department employee

may exercise a power granted to the director if the employee

is “designated in writing by the director.” The statute also

states that “[a]ny such designation shall be filed in the office

of the Secretary of State.” Taxpayer seeks a declaration of

his rights and an injunction prohibiting the department

from pursuing garnishment or asset seizure against tax-

payer before offering him an installment agreement that

has been determined to facilitate collection by a properly

designated employee of the department.

The department does not argue the merits of tax-

payer’s first claim; nor, however, does the department fully

acknowledge any failure to designate employees in accor-

dance with ORS 305.057. Instead, the department asserts

that the claim is moot because the director later filed the

2016 Delegation, approximately two months after taxpayer

filed his complaint in the Magistrate Division. Taxpayer

does not dispute that the 2016 Delegation fulfills the require-

ments of ORS 305.057 as to the department employees it

designates, but he denies that the filing of that Delegation

renders his first claim moot. The court will first consider the

department’s mootness argument.

164 Christensen II v. Dept. of Rev.

1. Mootness

A claim is moot if, due to a change in facts since the

commencement of the action, the “ ‘court’s decision no longer

will have a practical effect on or concerning the rights of the

parties.’ ” See Nordbye v. BRCP/GM Ellington, 271 Or App

168, 178, 349 P3d 639 (2015) (quoting Brumnett v. PSRB, 315

Or 402, 406, 848 P2d 1194 (1993)); State v. Lavitsky, 158 Or

App 660, 663, 976 P2d 82 (1999) (“[d]etermining whether a

case is moot is part of a larger two-part inquiry into whether

a case is justiciable” (citing Brumnett, 315 Or at 405)). Thus,

even if a party may be able to sustain a claim, the court

may refuse to rule on that claim because it would not affect

rights between the parties. See Barcik v. Kubiaczyk, 321 Or

174, 188, 895 P2d 765 (1995); see also Couey v. Atkins, 357 Or

460, 470-71, 355 P3d 866 (2015) (rejecting claim for declar-

atory relief based on “contingent and speculative facts”).

Whether a claim is moot depends on the requested relief

supported by that claim, because it is the obtainable relief

that has a practical effect on the parties, not the proving

of the elements of a claim. See Brown v. Oregon State Bar,

293 Or 446, 449, 648 P2d 1289 (1982) (“A justiciable con-

troversy results in specific relief through a binding decree

as opposed to an advisory opinion which is binding on no

one.”).

The department argues that its filing of the 2016

Delegation was a change in circumstances that renders tax-

payer’s first claim moot, because that filing allows taxpayer

the chance to seek an installment agreement determined

by a department employee acting in conformance with ORS

305.890(1) and ORS 305.057.

With respect to declaratory relief, the department

has not shown that the filing of the 2016 Delegation, by

itself, was a sufficient change in circumstances. Both before

and after the filing, the director could have made an appro-

priate determination about installment terms personally, or

potentially through the deputy director, whose authority to

act in the director’s stead is governed by a separate statute

not cited by the parties. See ORS 305.065. The department

has always had sufficient personnel to comply with ORS

Cite as 23 OTR 155 (2018) 165

305.890(1),4 but it did not do so in 2015 in taxpayer’s case.

The fact that additional personnel now are available does

not make taxpayer’s case moot, at least when the relief tax-

payer seeks is a declaration of his right to have the depart-

ment comply.

Similarly, as to taxpayer’s request for an injunction,

the court sees nothing in the filing of the 2016 Declaration

that changes the likelihood that the department will seek

to collect taxpayer’s tax debt from third parties between

the end of this case and the effective date of any future

installment agreement. If the court were to issue the injunc-

tion, suspending collection clearly would have a sufficient

“practical effect” to make taxpayer’s first claim not moot.

The filing of the 2016 Delegation is insufficient to render

taxpayer’s first claim moot. See Lavitsky, 158 Or App at

663.

2. Merits of Taxpayer’s First Claim

ORS 305.890(1) affords taxpayer a right to enter

into an installment agreement to pay the tax he owes, condi-

tioned upon the department’s director (or another employee

acting by the director’s authority) determining that the

agreement will facilitate collection. The parties have stip-

ulated that the director “did not personally determine

whether the requested agreement would facilitate collec-

tion.” Accordingly, the question is whether a valid delegation

was in place pursuant to ORS 305.057.

The court finds three requirements in ORS 305.057.

First, the director must delegate a power to another depart-

ment employee. Second, the director must designate that

employee in writing. Third, the written designation must

be filed with the Secretary of State. The parties have stip-

ulated that the director “did not have a written delegation

on file with the Secretary of State that explicitly referred to

installment agreements under ORS 305.890.” This stipula-

tion does not fully address any of the three requirements.

As to the first two requirements, the stipulation leaves open

4

Cf. Blue Iguana, Inc. v. OLCC, 258 Or App 535, 546, 310 P3d 720 (2013)

(OLCC director personally signs every adjudicated decision).

166 Christensen II v. Dept. of Rev.

whether any delegation existed—written, oral, or implied.5

As to the third requirement, the stipulation declares only

that nothing in the delegation on file at the time (2015)

“explicitly” referred to installment agreements.

The wording of the stipulation raises the question

whether the 2013 Delegation can be read to impliedly cover

installment agreements under ORS 305.890. To answer

this question, the court must first examine the purpose of

the designation requirement in ORS 305.057 as applied to

installment agreement authority under ORS 305.890(1).

The text of ORS 305.057 is silent as to the purpose of its

requirements, as is its legislative history,6 but its basic pur-

pose is apparent from the statutory context.

The context first reveals that ORS 305.890(1) is not

unique; the legislature often decides to vest a particular

power in the director rather than in the department as an

agency. Although ORS 305.015 entrusts the overall adminis-

tration of the tax laws of Oregon to both “the Department of

5

The record also includes the two PAPs, which provide standards as to pay-

ment plans for revenue agents in the department’s collection unit. The PAPs and

accompanying declarations seem to imply that certain department employees

could consider requests for installment agreements, but the court nowhere finds

a delegation to them from the director.

6

The bill that enacted ORS 305.057 was the enabling act that created the

department and abolished its predecessor, the State Tax Commission. The leg-

islative history does not discuss the provisions that were later codified as ORS

305.057 or its companion statute ORS 305.065, which requires the director to

file with the Secretary of State any order designating a deputy director. Or Laws

1969, ch 520, §§ 7(3), 8. The present text of ORS 305.057 has been unchanged since

enactment. The court also has reviewed the legislative history of ORS 184.635(2),

enacted the same year, which contains language similar to ORS 305.057 (with

the filing requirement set off in its own sentence), but the relevant language was

part of the initial proposed bill and received no discussion during the legislative

process. Or Laws 1969, ch 599, § 6. ORS 183.325, however, is of some interest

to the court. That statute appears in Oregon’s Administrative Procedures Act,

and provides for the delegation of rulemaking authority of agencies. Originally,

ORS 183.325 only required a delegation of authority to be made in writing. Or

Laws 1979, ch 593, § 10. However, it was amended in 1993 to require that a “del-

egation of authority under this section must be made in writing and filed with

the Secretary of State before the filing of any rule adopted pursuant to the dele-

gation.” Or Laws 1993, ch 729, § 1. Without assigning any weight to the legisla-

tive history of the 1993 amendment of ORS 183.325, the court notes that certain

statements suggest that the purpose of the filing requirement may include assist-

ing the Secretary of State in verification of the authority of certain individuals

submitting rules for publication. Exhibit A, Minutes, House Committee on Rules

and Reorganization, HB 2262, Jan 27, 1993, 2 (comments by Professor William

Funk).

Cite as 23 OTR 155 (2018) 167

Revenue and its director,” the tax statutes assign numerous

powers to the department, some of them broad and others

specific.7 The legislature has, however, assigned an array of

specific powers to the director, including the use of particu-

lar enforcement and collection tools as well as administra-

tive powers such as the authority to call meetings of county

assessors, procure supplies for the agency, and extend stat-

utory periods of limitations in an emergency.8 The Oregon

Supreme Court previously has given effect to the distinction

between powers vested in the director or in the department.

See Okorn v. Dept. of Rev., 312 Or 152, 818 P2d 928 (1991)

(rejecting taxpayer’s argument that department’s assess-

ment of income tax was invalid due to lack of written, filed

delegation under ORS 305.057, where statute had vested

determination and assessment authority in the depart-

ment rather than in the director). There is no doubt that the

statute at issue in taxpayer’s first claim vests installment

agreement authority in “the director,” as the statute uses

that phrase around a dozen times. See ORS 305.890.

Second, statutory context shows that the overall

purpose of ORS 305.057 is to provide public notice. The iden-

tity of the director is a matter of public record, as the director

is appointed by the Governor and confirmed by the Senate.

ORS 305.035(1) - (2). When the director delegates a power to

another department employee, ORS 305.057 requires the

director to designate that employee in writing and to file the

7

These include the power to “administer and enforce” the personal income

tax laws (ORS 316.032(1)), the power to make administrative rules (ORS 305.100),

and the authority to enter into settlements with taxpayers as to the amount of

tax owed (see ORS 305.150).

8

See, e.g., ORS 118.300 (approve sureties for deferred payment of estate tax);

ORS 279A.050 (conduct, supervise, and manage procurement for the agency in

accordance with the procurement code and administrative rule); ORS 305.120

(request assistance to institute and conduct prosecutions for violations of the

laws in respect to the collection of public taxes and revenues); ORS 305.157 (issue

an order extending a statutory period of limitation); ORS 305.182 (certify UCC

warrants for unpaid taxes); ORS 305.190(1) (subpoena and examine witnesses,

administer oaths, and order production of books or papers); ORS 305.200 (cer-

tify witness fees and mileage); ORS 305.612 (enter into an intergovernmental

reciprocal agreement with the United States for the purpose of engaging in the

offset of federal tax refunds and other federal payments); ORS 305.850(3) (assign

accounts to a private collection agency); ORS 306.150(2) (call a meeting of the

county assessors and provide for payment of their necessary traveling expenses);

ORS 308.636 (correct assessment roll to reflect omitted property); ORS 314.419(1)

(issue an execution order directing seizure of property subject to a tax lien).

168 Christensen II v. Dept. of Rev.

designation with the office of the Secretary of State, which

is charged with “keep[ing] a fair record of the official acts

of the * * * Executive Branch.” Or Const, Art VI, § 2. The

apparent purpose of the filing is to provide general notice,

delivered to the constitutional repository of public records,

that enables any interested person to identify the depart-

ment employee or employees designated to act in delegated

matters.

The relevance of notice of a designation under ORS

305.057 depends on the particular power delegated and on

the relationship of the notice recipient to the taxpayer or

other person affected by the exercise of delegated power.

For example, public notice of delegations allows: the state

treasurer to verify the authority of department personnel

requesting the issuance of checks for witnesses the depart-

ment calls in the course of an audit (see ORS 305.200); a

district attorney or the state attorney general to verify the

validity of a request for assistance in a criminal tax prose-

cution (see ORS 305.120); and the Internal Revenue Service

to verify its countersignatory before entering into an inter-

governmental agreement to offset taxes due against refunds

owed (see ORS 305.612). Consistent with this purpose, the

format of the 2013 and 2016 Delegations makes it easy for

an official or a member of the public to confirm at a glance

that the department employee who is purporting to act is

authorized to do so: Each delegation lists the name of an

individual employee at the beginning of a new line of text,

then identifies the specific section of each subject statute

in a freestanding, indented subparagraph beneath that

line.

Keeping in mind this notice function, the court next

turns to whether the 2013 Delegation, which was in place

during the parties’ negotiations, implicitly designated any

employees to make installment agreement determinations.

The court concludes that it did not. The 2013 Delegation

clearly did designate and authorize one or more employees

to undertake certain specific income tax collection activi-

ties: certifying “UCC warrants” for unpaid taxes under ORS

305.182; assigning accounts to a collection agency (ORS

305.850(3)); and ordering a sheriff to seize property subject

to a tax lien (ORS 314.419(1)). Each of these three activities

Cite as 23 OTR 155 (2018) 169

is a collection tool that the director may choose to employ in

his or her discretion.9

However, as the parties have stipulated, the 2013

Delegation nowhere mentions installment agreements, nor

does it cite ORS 305.890. Each of the three explicitly named

collection tools is separate and independent. There is no nec-

essary link among them such that delegation of one implies

the delegation of another. Moreover, nothing in statute

suggests that installment agreements must be considered

before the director may resort to the collection tools explic-

itly delegated in the 2013 Delegation. Therefore, the court

cannot infer that the director in 2013 delegated his powers

under ORS 305.890 as a necessary predicate to, for example,

assigning accounts to a collection agency. The director then

in office might simply have intended to only delegate the

named collection tools in the 2013 Delegation while retain-

ing the power to consider installment agreements to himself

and his deputy.

Given the legislature’s directive to the director to

give public notice of a delegation to another employee, and

the clear and specific manner in which the director has

designated employees to assume numerous other functions

delegated to the director, it would not be reasonable to find

that any of the specific designations in the 2013 Delegation

impliedly encompasses the consideration of installment

agreements.10

Because the court concludes that the director did

not satisfy the requirements of ORS 305.057, the next ques-

tion is whether his failure to file a written delegation before

another department employee considered or offered an

installment agreement violated taxpayer’s right pursuant

9

See ORS 305.182(1) - (2) (providing the department “may file warrants

issued against any taxpayer” with the Secretary, and requiring the director to

certify the warrants); ORS 305.850(3) (providing the director “may assign to the

collection agency * * * any of the taxes, penalties, interest and moneys due the

state”); ORS 314.419(1) (providing that a lien “may be foreclosed” if the director

“issue[s] an order directed to the sheriff * * * describing the property subject to

the lien, and commanding the sheriff to seize the property specified and sell it to

pay the amount shown on the order to be due”).

10

The 2016 Delegation, filed after taxpayer commenced his action in the

Magistrate Division, specifically cites ORS 305.890 and specifically refers to

“installment payment plans.”

170 Christensen II v. Dept. of Rev.

to ORS 305.890(1). In contrast to many of the circumstances

discussed above, the notice served by a written, public dele-

gation of authority under ORS 305.890(1) appears primarily

directed to taxpayers themselves, rather than to third per-

sons such as state or local officials outside the department.

The court derives this conclusion from the context of several

other provisions enacted as part of the TBOR, all of which

show an intention to require the department to communi-

cate directly with taxpayers, and in particular to specify

details about the department’s audit and collection processes

in ways designed to ensure transparency and accountability

in those processes. See ORS 305.860 (requiring the director

to prepare and distribute a nontechnical statement explain-

ing taxpayer rights during the department’s audit, appeal,

refund, and enforcement processes); ORS 305.875 (listing

six rights of a taxpayer in “any meeting or communication

with the [d]epartment,” including rights to explanations of

the audit, administrative appeal and collection processes,

and the right to record meetings); ORS 305.880 (allowing

taxpayer to invoke a right to have interest or penalties

waived if a department employee misleads a taxpayer);

ORS 305.885 (right to a “clear explanation” of the basis

for an underpayment in the initial communication of any

underpayment).

Against this backdrop, the court concludes that the

legislature’s decision to vest installment agreement author-

ity specifically in the director, rather than in the depart-

ment as an agency, is designed to notify taxpayers which

employees will decide the critical question whether to allow

installment payments in their case. If not the director per-

sonally, then the decision-maker must be someone whom the

director has publicly identified. Similar to another provision

of the TBOR, this information tells a taxpayer who bears

the responsibility if the taxpayer feels aggrieved. See ORS

305.895(2)(d) (prewarrant notice must inform taxpayer “the

name, office mailing address and office telephone number of

the person issuing the warrant” for purposes of “questions

or complaints” concerning the warrant).

Although this right to information is limited in

scope, the court concludes that the department clearly vio-

lated it in this case. The “payment agreement” that the

Cite as 23 OTR 155 (2018) 171

department mailed to taxpayer on September 2, 2015, was

the last document in the record that the parties exchanged

in their negotiations. That document identifies its sender

only by the name “Cathy #18” and the title “Revenue Agent.”

Nothing in that document, or in any other document in the

record, names any individual at the department who deter-

mined that the agreement would facilitate collection, much

less whether that individual had been delegated authority

to do so. At least in the absence of a designation filed with

the Secretary of State, the department’s correspondence

with taxpayer contravenes the letter and spirit of the stat-

utes requiring the director either to personally decide on an

installment agreement or to publicly identify which other

department employee would do so.11

3. Relief Sought in First Claim

a. Declaratory Relief

A request for declaratory relief is a request for the

court to use its power to declare the rights, status, and

other legal relations of a party. ORS 28.010. The court may

issue a declaratory judgment “whether or not further relief

is or could be claimed.” Id. “However, declaratory relief is

available only when it can affect in the present some rights

between the parties; that is, * * * there must be a justiciable

controversy between the parties on ‘which judgment may

effectively operate.’ ” Barcik, 321 Or at 188 (quoting State

Farm Fire & Cas. v. Reuter, 294 Or 446, 449, 657 P2d 1231

(1983)) (emphasis in original).

Taxpayer has made two requests for declaratory

relief as to this claim. First, he seeks:

11

The department asserts that a ruling in favor of taxpayer on his third

claim potentially would affect tens of thousands of payment plans currently in

place. However, the department has not expressed a similar concern regarding

a ruling on taxpayer’s first claim, presumably because the department’s prac-

tice is to agree to terms of a payment plan that will pay the tax debt within

the shortest period possible, often 12 to 18 months. Taxpayer commenced his

action in the Magistrate Division in October 2015, and the department filed its

2016 Delegation about two months later. In any event, the court today holds only

that the department violated taxpayer’s right in the making or consideration of

an offer (or counteroffer) for an installment agreement; the parties agree that

they never entered into a contract. The court expresses no view on whether the

failure to properly designate an employee could affect any otherwise enforceable

contract.

172 Christensen II v. Dept. of Rev.

“A declaratory judgment stating that Department of

Revenue employees lack the authority to offer or enter into

installment agreements in the absence of a written dele-

gation of the Director’s authority to determine whether an

installment agreement will facilitate collection, and that

such delegation must be filed in the office of the Secretary

of State.”

Taxpayer’s second request is for:

“A declaratory judgment stating that Defendant failed to

offer plaintiff an installment agreement that meets the

requirements of ORS 305.890.”

Taxpayer’s first request refers generally to all

department employees and all installment agreements and

thus asks the court to go beyond declaring the rights of the

parties in the controversy before the court. For that reason,

the court rejects taxpayer’s first request.

Taxpayer’s second request does not suffer from

overbreadth, as it would apply only to him. However, the

request seeks a ruling on the validity of the department’s

determination in 2015. Read in isolation, the request does

not “declare” the present rights of a party to guide that par-

ty’s future conduct. Barcik, 321 Or at 188. However, tax-

payer’s later arguments make clear that he continues to

want an installment agreement for the tax he undisputedly

owes, and that he is asking the court to declare his rights

so that he can resume negotiations with the department.

The department acknowledges that taxpayer wants a new

installment agreement, but the department asserts (with-

out reference to a factual declaration or to legal authority)

that a declaration would have no legal effect, as taxpayer is

always free to make a new request for an installment agree-

ment. The court concludes that, on the record before it, a

declaration of rights is appropriate for future negotiations

over an installment agreement. A general declaration will

suffice, given the amount of time that has passed and the

possibility that any number of facts may have changed. The

court grants the substance of taxpayer’s second request and

is prepared to declare in its judgment that taxpayer has a

present right to an installment agreement if the director or

Cite as 23 OTR 155 (2018) 173

a department employee whom the director has properly des-

ignated under ORS 305.057 determines that an installment

agreement will facilitate collection.

b. Injunctive Relief

“An injunction is a judicial order requiring a per-

son to do, or refrain from doing, certain acts.” 43A CJS

Injunctions § 1 (Aug 2018 Update); see generally Wiegand v.

West, 73 Or 249, 144 P 481 (1914) (discussing the prospec-

tive nature of injunctive relief). “An injunction is an extraor-

dinary remedy, to be granted only on clear and convincing

proof of irreparable harm when there is no adequate legal

remedy.” Knight v. Nyara, 240 Or App 586, 597, 248 P3d 36

(2011) (citing Wilson v. Parent, 228 Or 354, 369-70, 365 P2d

72 (1961)). To qualify for injunctive relief, the claimant must

demonstrate that there is a cognizable threat of continuing

harm stemming from conduct that is probable or threat-

ened. Eagles Five, LLC v. Lawton, 250 Or App 413, 422, 280

P3d 1017 (2012); see also LeVasseur v. Armon, 240 Or App

250, 259, 246 P3d 1171 (2010); McCombs et al v. McClelland,

223 Or 475, 485, 354 P2d 311 (1960).

Taxpayer asserts that he “will be in immediate

danger” of “enforced collections,” including “garnishment or

asset seizure,” when his lawsuit ends and the stay of collec-

tion under ORS 305.565(1) terminates. He requests:

“An order enjoining Defendant from enforcing collections

through garnishment or asset seizure before offering

plaintiff an installment agreement that * * * has been

determined to facilitate collection by either the Director of

the Department of Revenue, or a Department of Revenue

employee authorized to make such determinations via

written designation of authority filed with the Secretary of

State’s office.”

The court concludes that taxpayer has failed to

carry his burden to show clear and convincing proof of irrep-

arable harm. Knight, 240 Or App at 597. The court does not

decide whether any principle of law requires the depart-

ment to suspend any collection activities during good-faith

negotiations over installment agreements. However, even

if the department is required to suspend collections, such

that taxpayer would be “harmed” by continuing collections,

174 Christensen II v. Dept. of Rev.

taxpayer has not shown clear and convincing evidence of a

risk that the department will violate such a requirement.

The evidence of the parties’ dealings to date does

not support taxpayer’s position. Although there is evidence

that the department is prepared to immediately begin col-

lecting his tax from third parties, inasmuch as the depart-

ment issued distraint warrants in June 2015 and notices

of its intent to offset federal tax refunds on August 11,

2015, there is no indication that the department actually

used those tools to force collection from third parties in

2015 or, if so, that those actions occurred during negotia-

tions with taxpayer. The only evidence as to the start date

of the prior negotiations is that taxpayer apparently first

submitted a financial statement to the department request-

ing an installment agreement on August 14, 2015, after the

department had already issued the warrants and the notice

of its intention to offset taxpayer’s federal tax refund. Oral

negotiations might have begun earlier, and the department

might have been collecting from third parties during those

discussions, but taxpayer offers no evidence of that.12

In summary, given the record in this case, regard-

less of whether the department has legal authority to try to

collect taxpayer’s tax debt from third parties while simulta-

neously resuming negotiations with taxpayer over install-

ment terms, taxpayer has not shown by clear and convinc-

ing evidence that there is a risk that the department will do

so. The court denies taxpayer’s request for injunctive relief.

12

The following additional facts tend to undermine any evidentiary basis

for taxpayer’s request. First, in each of its collection notices, the department

provided taxpayer a document called “Your Rights as an Oregon Taxpayer.” In

that document the department explains that it prefers to work with taxpayers

so that they can pay their tax voluntarily. Second, although the 2015 negotia-

tions ended unsuccessfully, with a wide disparity between the parties’ offers, the

record provides no indication that either party acted in bad faith. At least some,

and perhaps the bulk, of the amount separating the parties appears to relate to

a principled dispute over whether taxpayer’s attorney fees incurred in represent-

ing taxpayer in the collections matter are an expense that the department must

allow in setting a monthly payment amount. Finally, although not part of the fac-

tual record, the court notes that the department argued that taxpayer is free to

request another installment agreement from the department and characterized

taxpayer’s concerns about immediate forced collection as “presum[ing] too much,”

while agreeing that “forced collection is possible if [the parties] cannot agree on an

installment arrangement.” (Emphasis added.)

Cite as 23 OTR 155 (2018) 175

2. The Court Need Not Decide Taxpayer’s Third Claim

Because the court concludes that the department

denied taxpayer his right to enter into an installment agree-

ment whose terms have been considered by the director or

an authorized delegate, the court need not decide taxpay-

er’s third claim that the department’s consideration of his

application was in error, or what standard of judicial review

applies to that consideration. If taxpayer asserts his right

anew, or if the department decides on its own to consider

an installment arrangement, the department no doubt

will make a fresh determination based on the facts as they

stand at that time rather than rely on past income, expense,

and asset information. See Courter v. City of Portland, 286

Or App 39, 46, 398 P3d 936 (2017) (quotation marks omit-

ted) (stating “a claim is ripe for adjudication if it involves

present facts, as opposed to future events of a hypothetical

nature”).

C. Taxpayer’s Second Claim: Rulemaking

Taxpayer’s second claim is that the department is

required to promulgate administrative rules defining the

term “facilitate collection” in ORS 305.890(1) before the

director or a delegate can determine whether an install-

ment agreement facilitates collection of a tax liability. ORS

305.890(1) states:

“A taxpayer shall have the right to enter into a written

agreement with the Department of Revenue to satisfy lia-

bility for payment of any tax in installment payments if the

Director of the Department of Revenue determines that the

agreement will facilitate collection of such liability.”

(Emphasis added.) No provision of the TBOR expressly

requires the department to adopt administrative rules

with respect to ORS 305.890(1); therefore, the question is

whether, applying established principles of statutory inter-

pretation, the court discerns in the statutes regulating the

department an “implicit directive from the legislature for

rulemaking.” See Trebesch v. Employment Division, 300 Or

264, 270, 710 P2d 136 (1985). As a tool in this inquiry, the

Oregon Supreme Court has identified three factors for the

court to consider, namely, the “character of the statutory

term in dispute,” the “authority delegated and the tasks

176 Christensen II v. Dept. of Rev.

assigned to the agenc[y],” and the “structure by which the

agenc[y] execute[s] [its] task[ ].” Id.

1. Character of the Term

The term at issue is “facilitate collection,” as used

in ORS 305.890(1). The court in Trebesch acknowledged

that, absent an explicit statutory directive to promulgate

rules, “the breadth and kind of responsibility delegated to

the agency by the statutory term (fact-finding, applying an

ambiguous law, or developing policy) will be one, but not a

dispositive, factor which may indicate an implicit directive

from the legislature for rulemaking.” 300 Or at 270 (emphasis

added). Other opinions describe these three broad categories

as consisting of “precise” or “exact” terms requiring only fact-

finding; “inexact” terms requiring agency interpretation; or

“delegative” terms, meaning that the agency must make a

legislative policy determination. See Springfield Education

Assn. v. School Dist., 290 Or 217, 223, 621 P2d 547 (1980);

Coffey v. Board of Geologist Examiners, 348 Or 494, 503 n 12,

235 P3d 678 (2010); Blue Iguana, 258 Or App at 544-46.

The Supreme Court recently provided guidance on

these categories in a case involving the appropriate amount

of deference to an agency decision with respect to its applica-

tion of a statutory term. See OR-OSHA v. CBI Services, Inc.

(CBI), 356 Or 577, 584-85, 341 P3d 701 (2014). In CBI, the

Supreme Court identified four inquiries relevant to the type

of term. First, the court should compare the term to those

that have already been held to be delegative in nature. CBI,

356 Or at 590. Second, the court should consider whether

the term is defined by statute or instead is readily sus-

ceptible to multiple interpretations. Id. Third, the court

should consider “whether the term in contention requires

the agency to engage in policy determination or make value

judgments, as opposed to interpreting the meaning of the

statute.” Id. Finally, the court should consider the context

to see “whether other provisions suggest that the legislature

did or did not intend a term to be regarded as delegative.” Id.

a. Comparison to Other Delegative Terms

The court has found no case determining that the

term “facilitate collection” itself is delegative in nature.

Cite as 23 OTR 155 (2018) 177

Some terms that the Supreme Court has found to be dele-

gative include “good cause,” “fair,” “undue,” “unreasonable,”

“unprofessional conduct,” and “clearly an excessive remedy.”

Springfield Education Assn., 290 Or at 228; Bergerson v.

Salem-Keizer School District, 341 Or 401, 412-13, 144 P3d

918 (2006); see also U.S. Bancorp v. Dept. of Rev., 19 OTR

266, 288-89 (2007) (characterizing the phrases “fairly and

accurately” and “fair and equitable” as “delegating policy-

making discretion” to the department to make income tax

rules that are “legislative” in character). “Facilitate collec-

tion” does not require the department to make fundamental

value judgments or to balance competing policy concerns,

in contrast to terms such as “fair” or “unreasonable” or

“excessive.” However, the meaning of “facilitate collection”

is also not so obvious or plain as “30 days” or “21 years of

age”; to apply it, the department must do more than simply

tick off items on a checklist of objectively verifiable facts.

Cf. Springfield Education Assn., 290 Or at 223. The com-

parison approach places the term “facilitate collection”

somewhere between the examples of delegative and exact

terms; the term therefore appears to be an inexact term

that expresses complete legislative meaning but with less

precision than an exact term. CBI, 356 Or at 585.

b. Statutory Definitions; Ambiguity

The court next considers whether the term “facili-

tate collection” is defined by statute or whether the meaning

can otherwise be determined by applying the ordinary tools

of statutory construction, including analysis of the text and

statutory context, any relevant legislative history, and per-

tinent maxims of statutory construction. See CBI, 356 Or

at 584-85 (citing State v. Gaines, 346 Or at 171-72; PGE v.

Bureau of Labor and Industries, 317 Or 606, 610-12, 859 P2d

1143 (1993)). The court will consider each term separately

before considering them together.

The term “facilitate” is not defined in statute. “In

the absence of evidence to the contrary, we assume that the

legislature intended words of common usage to be given

their ordinary meanings.” CBI, 356 Or at 589 (citing Ogle v.

Nooth, 355 Or 570, 578, 330 P3d 572 (2014)). Webster’s Third

New International Dictionary defines “facilitate” as, “1: to

178 Christensen II v. Dept. of Rev.

make easier or less difficult : free from difficulty or impedi-

ment,” and “2: to lessen the labor of (as a person).” Webster’s

Third New Int’l Dictionary 812 (unabridged ed 2002). One

example given by Webster’s is to make easier or less difficult

the execution of a task. Id.

Likewise, the term “collection” is not defined in stat-

ute. Webster’s defines it as “the act of collecting (as taxes by

a tax collector).” Webster’s at 444. The term “collecting” is a

conjugation of the verb “to collect,” which means “to receive,

gather, or exact from a number of persons or other sources.”

Id. As an example, the dictionary quotes the Sixteenth

Amendment of the United States Constitution, which states:

“the Congress shall have the power to lay and collect taxes

on incomes, from whatever source derived * * *.” Webster’s at

444 (quoting US Const, Amend XVI). The term also means

“to claim and receive in payment or fair recompense,” or “to

present as due and receive payment for.” Id.

The term “facilitate collection” joins two words of

common usage. Neither party has argued that the term

“facilitate collection” is a term of art, such that it might have

a special meaning that differs from the combination of its

two parts. See Comcast Corp. v. Dept. of Rev., 356 Or 282,

296-97, 337 P3d 768 (2014). The legislative history points

to no special meaning of either word separately or of the

phrase as a whole. Accordingly, the court concludes that the

term “facilitate collection” means to make easier the gather-

ing or receipt of tax moneys.

Taxpayer raises the question: easier for whom?

Perhaps reasoning that an “agreement” requires the assent

of both parties, taxpayer challenges the possibility that the

legislature intended the director to evaluate whether an

installment agreement makes it easier for the department.

Citing no evidence or supporting authorities, taxpayer spec-

ulates that wage garnishment and other asset seizure reme-

dies are likely the easiest ways for the department to collect

tax. Based on that premise, taxpayer seeks to characterize

the term as ambiguous and in need of definition by rule.13

13

Taxpayer claims that “facilitate collection” could have alternative mean-

ings ranging from maximizing the amount collected to minimizing the depart-

ment’s effort, or perhaps that the term implies a duty to use good faith in deter-

mining a taxpayer’s ability to pay.

Cite as 23 OTR 155 (2018) 179

The problem is that taxpayer’s premise is without founda-

tion; one could just as easily speculate that immediately

resorting to wage garnishment and asset seizure in every

case would tend to backfire by inciting public resistance,

making collection overall more difficult for the department.

Meanwhile, the text and context of ORS 305.890(1)

answer the question. A taxpayer has a right to an install-

ment agreement “if the Director * * * determines that the

agreement will facilitate collection of such [tax] liability.”

ORS 305.890(1). Within that clause, the director is the sole

actor and is charged with making the determination, and

other statutes clearly charge the director’s agency with col-

lecting the tax. See ORS 305.120(1) (“The Department of

Revenue shall see that * * * all taxes are collected * * *.”).

The fact that both parties need to assent in order to form a

contract does not make the scope of the department’s duties

ambiguous; it means only that the taxpayer is free to reject

the department’s offer or counteroffer. The court concludes

that the ordinary meaning of “facilitate collection” requires

the director to determine whether an installment agree-

ment would make it easier for the department to collect the

tax.

Perhaps a more relevant question is: easier than

what? “Facilitate” is a relative term, as reflected in the com-

parative adjectives “easier” and “less difficult” and the verb

“lessen” in the dictionary definition above. ORS 305.890(1)

thus requires the director to use an installment agreement to

collect tax, instead of other means of collection, if the install-

ment agreement will result in less burden and difficulty for

the department. Without directly addressing this point, the

department lists several of its collection tools alternative to

installment plans. Nearly all these alternatives require the

department to identify, contact, and depend on third par-

ties, such as an employer or financial institution in the case

of garnishment (see ORS 314.430(4) and ORS 18.854 (refer-

ring to the person having “possession, control or custody” of

a debtor’s property)) or a county clerk and sheriff in the case

of distraint warrants and the forced sale of assets (see ORS

314.430 (1), (2)). Issuance of a warrant entails a 30-day wait-

ing period in most cases. ORS 314.430(1). Some collection

alternatives come with restrictions on the type of property

180 Christensen II v. Dept. of Rev.

that may be seized or the amount that can be collected at

any one time. See, e.g., ORS 18.345(1) (exempting 16 cate-

gories of personal property); ORS 18.385(1) and (6) (gener-

ally exempting 75 percent of the disposable earnings of an

individual). The TBOR itself adds certain restrictions on the

issuance of a warrant, primarily additional notice require-

ments. See ORS 305.895. The court concludes, based on this

statutory context, that “facilitate collection” means that the

department must compare (1) the amount the department

will likely collect by directly interacting with the taxpayer

to negotiate an installment contract to which the taxpayer

agrees, with (2) the amount the department will likely col-

lect using other tools, in both cases taking into account

other appropriate factors, which might include direct and

indirect costs of collection, the likelihood of success, and the

potential speed of collection.14

The parties look beyond the text and context of ORS

305.890(1) to portions of the legislative history of the TBOR.

The court now considers those materials, along with addi-

tional legislative history that the parties did not cite. First,

by way of background, the TBOR was not enacted as a free-

standing act; rather, the TBOR comprised 10 sections out of

92 in House Bill 2209. See Or Laws 1989, ch 625, §§ 65-74.

One legislator described the bill as the session’s “reconnect

bill * * * that also included many other non-reconnect issues,”

referring to Oregon’s routine process, approximately every

one or two years, of updating state income tax law to either

conform to changes in the federal Internal Revenue Code or

to identify changes to reject. Minutes, House Committee on

Revenue and School Finance, Apr 20, 1989, 4.

Taxpayer relies on a report of the Oregon Society of

Certified Public Accountants, whose representatives testi-

fied in committee hearings. OSCPA Report, 12.1 - 12.2; see

also Christensen I, 22 OTR at 391. Taxpayer quotes a por-

tion of the OSCPA Report’s introduction to the then-recently

adopted federal taxpayer bill of rights:

“This taxpayer bill of rights is a very significant body of

legislation for the average taxpayer. It is a collection of

14

The court does not determine whether the director or department must make

an individually tailored accounting of likely costs and collections in each case.

Cite as 23 OTR 155 (2018) 181

provisions designed to clarify and strengthen taxpayer

rights, better inform them of their rights and provide more

alternatives to get relief from IRS action. The Oregon

Department of Revenue is strongly encouraged to review

its practices and procedures in light of the federal action

and conform where possible. In the spirit of conformity,

a set of uniform procedures that taxpayers can generally

follow or be subject to should minimize confusion between

federal and Oregon law in this area.”

OSCPA Report at 12.1. From this statement, taxpayer

argues that the legislature “anticipated that the Department

would adopt a set of uniform procedures to provide guid-

ance and certainty for taxpayers in the collection pro-

cess. Without regulations, there is no uniformity in the

Department’s procedures.” There are at least two problems

with this argument.

First, although committee members certainly con-

sidered the OSCPA Report throughout their hearings, the

court does not automatically attribute to legislators any

intentions expressed in the OSCPA Report, which was an

exhibit proffered by a third-party organization. Even if the

court were so inclined, the court notes that the passage on

which taxpayer relies discusses practices and procedures, not

administrative rules.15 Id. Nothing in the TBOR portions of

the OSCPA Report discusses rulemaking for any purpose,

including to set standards for the making of installment

agreements.16

15

The record shows that the department did set out its practices and proce-

dures in some detail, although those PAPs were distributed only internally. At

the court’s request, the parties submitted additional briefs on whether the PAPs

and the department’s financial calculator constituted administrative rules even

though the department did not promulgate them as such. Both parties agreed

that the PAPs are “internal management directives,” which are excepted from

the definition of an administrative rule. Both parties also agreed that the depart-

ment’s financial calculator is not an administrative rule.

16

In addition, it is not clear that the quoted passage has anything to do

with the initial making of installment agreements. The entire OSCPA Report

contains only one sentence specifically addressing installment agreements,

and that sentence states that “[t]he [federal] Act establishes specific conditions

under which the IRS may change or terminate taxpayer installment agree-

ments for paying tax.” OSCPA Report at 12.2 (emphases added). Consistent

with that emphasis, four of the five subsections of ORS 305.890 address the

conditions in which the director may change or terminate an installment

agreement.

182 Christensen II v. Dept. of Rev.

Second, testimony by two representatives of the

department informed the legislature that the department

had already been entering into, and modifying, install-

ment agreements, and that the bill would not substantially

change current law or practice. This testimony seems to

have prompted praise from the legislators who heard it,

rather than a direction to adopt rules. The department’s

Audit Division Administrator, Jim Manary, had the follow-

ing colloquy with Representative Bruce Hugo:

“[Jim Manary:] The next provision [is] conditions for

terminating installment agreements. The uh, the federal

law has a list of things, including once an installment

agreement is in effect, the IRS can now terminate it if the

taxpayer giving them—has given them inaccurate infor-

mation, or refuses to supply accurate information, fails to

pay the installment on time, if the IRS determines that

the assessment’s in jeopardy, that they are trying to move

out of the country or do something, um, and also if there’s

a change in financial circumstance. Now we follow all that

as practice already. One thing we do in addition to this

though, we have a regular—we have an ability to change

an installment agreement by a supervisor. Now, sometimes

for instance one of our revenue agents over the phone will

enter into an agreement with a taxpayer, and then sometime

down the line the taxpayer will call and say, well I entered

into this at the time but I was probably too optimistic about

my financial situation and the payments are just too high. I

can’t meet them. We will have a supervisor review that agree-

ment in terms of their ability to pay and adjust it if that’s

necessary. And I don’t know if this is covered—I’m not sure

that’s really covered because the federal specifies only the

five areas. We would like to retain the ability to adjust an

installment agreement if it appears that it still is not—it’s

unreasonably high or low, either one. That doesn’t happen

very often, most often it’s when a taxpayer calls and says,

well I agreed to it initially but I really can’t keep with it

very well. So, that’s—other than that we’re fine with it.

“[Representative Bruce Hugo, Chair:] * * * [A] political

question, why did the department not choose to do some-

thing like this just from your own PR standpoint?

“[Jim Manary:] Uh, I guess the primary reason would

be that we didn’t see it making substantial changes, and we

didn’t see that there were major problems that this would

Cite as 23 OTR 155 (2018) 183

solve. And it almost, from our perspective it almost carries

the connotation that there are major problems and now we

are going to solve them with this bill. And we didn’t see those

problems; maybe we were too close [to] it from the inside. We

didn’t see those kind of problems that we needed to address

with—

“[Representative Hugo:] In this case of the Department

of Revenue, I tend to agree with you that the reality is

that you are running a good shop. Perception out there is

entirely different, and unfortunately we have to deal with

perception a lot more than reality.”

Tape Recording, House Committee on Revenue and School

Finance, Subcommittee on State Government Finance, HB

2209, Feb 16, 1989, Tape 5, Side B (emphases added). In a

later hearing, Jim Brown of the department made the fol-

lowing statement, with which no one on the committee took

issue:

“I believe our department’s view, and I believe the view

of the House Revenue Committee as we dealt with these

rights is that, it was not designed to substantially alter

the current behavior of the Department of Revenue. They

were not dealing with the specific abuses, but they * * * felt

that it would be good tax policy to have those guaranteed

rights in the statute even if they weren’t being violated by

us today.”

Tape Recording, Senate Committee on Revenue and School

Finance, HB 2209, May 26, 1989, Tape 169, Side B (statement

of Jim Brown). Having been informed that the department

already entered into installment agreements, the committee

members still said nothing—in the bill or in their dialogue

with department representatives—about open policy issues

that the department should address, by rule or otherwise.

c. Policy Determinations or Value Judgments

Taxpayer argues that the term “facilitate collection”

delegates policymaking responsibility to the director, as

head of the department. The court does not agree. Keeping

in mind the definition just arrived at—to make the receipt

of tax moneys easier for the department—the determination

requires the director to undertake a cost-benefit analysis as

between an installment agreement and other alternatives.

184 Christensen II v. Dept. of Rev.

While it is true that this determination might incorporate

some high-level considerations, for example whether to treat

as a cost the damage to the department’s reputation and

effectiveness that might ensue if the department were to

act “more intrusive[ly] than necessary,” the requirement

to determine whether an installment agreement facili-

tates collection is pragmatic and administrative, not policy-

making. The court concludes that the term “facilitate collec-

tion” merely requires the director to apply a policy that the

legislature already has made: “The Department of Revenue

shall see that revenue officers comply with the tax and

revenue laws, that all taxes are collected, that complaint is

made against any person violating such laws and that pen-

alties prescribed by such laws are enforced.” ORS 305.120(1)

(emphasis added).

d. Context as Indicator of any Delegative Intent

The statutory context discussed above does not

indicate that the term “facilitate collection” delegates policy-

making responsibility to the department or its director. The

parties cite no other relevant statutory context. Nor is the

court aware of any. The director is tasked with applying

an inexact term and has not been delegated policymaking

responsibility.

4. Authority Delegated and Agency Structure

a. Uniform Adjudication

Taxpayer argues that the department’s structure

and division of authority imply that the legislature intended

the department to promulgate rules to assure uniform appli-

cation of ORS 305.890(1) to all taxpayers across the state,

analogizing to Trebesch. However, the statutory scheme and

agency structure in this case are materially different from

those in Trebesch, which involved a worker’s claim for unem-

ployment benefits. There, the statutes authorized a group of

initial decisionmakers and referees throughout the state to

adjudicate claims. The assistant director could both adjudi-

cate claims and make substantive rules. 300 Or at 273. The

Supreme Court emphasized that the legislature must have

intended that the assistant director communicate his or her

interpretations of the law throughout the agency in order to

Cite as 23 OTR 155 (2018) 185

assure uniform application of the law. Id. at 276-77. The court

stated:

“The assistant director does not have the choice to do noth-

ing to provide for consistent interpretation and application

of the broad terms of the statute. Some notice of required

job search efforts both to those who apply the term and

those, like claimant, to whom it is applied, is required when

a large volume of frequently recurring decisions is made by

* * * employes throughout the state.”

Id. The Supreme Court went on to hold that the assistant

director could choose to do this either through rulemaking

or through a series of well articulated decisions that would

give guidance to agency decisionmakers, and the court

remanded the case so that the assistant director could do

one or the other. Id. at 274.

The uniformity concerns in Trebesch are not pres-

ent here. When taxpayer applied in 2015, only the director

and his deputy were authorized to determine whether an

installment agreement would facilitate collection. The 2016

Delegation added only two authorized individuals, both of

whom were division heads within the department. A small

number of adjudicators in executive roles is less likely to

reach disparate results than the far-flung group of initial

decision-makers and referees in Trebesch. See Blue Iguana,

258 Or App at 546 (“[W]e observe that the need for central-

ized rulemaking in order to ensure statewide consistency

is obviated by the fact that OLCC is a centralized agency

whose practice is not delegated to several local or special-

ized offices. Although different administrative law judges

adjudicate different cases, all cases are reviewed by OLCC

itself and signed by the director.”). The legislature’s choice

to vest installment agreement authority in the director (and

the deputy) and the director’s practice, both before and after

taxpayer filed his appeal, of delegating that authority to

only a few additional executives, give the court no basis to

infer that the legislature saw a need for rules in order to

ensure uniformity.17

17

Taxpayer misses the mark in citing U.S. Bancorp v. Dept. of Rev., 19

OTR 266 (2007), which held that the department was required to adopt rules

under ORS 314.280 (governing income apportionment for financial organiza-

tions and certain other businesses). First, the legislature had expressly directed

186 Christensen II v. Dept. of Rev.

b. Informing the Public

Throughout his argument, taxpayer also urges the

court to find a rulemaking requirement on the grounds that

taxpayers at large have a need to know what standards

the department will apply in deciding whether to approve

an installment agreement. It is true that the passage from

Trebesch quoted above expresses concern that “[s]ome notice”

of the steps necessary to receive unemployment benefits

must be given to claimants, as well as to agency employees.

However, the nature of the decision that the director must

adjudicate under ORS 305.890(1) is fundamentally different

from the decision whether a claimant has taken adequate

steps to find a new job. In Trebesch, the Supreme Court

decided that an unemployed person needed notice of what he

had to do in order to have engaged in “systematic and sus-

tained effort to obtain work.” 300 Or at 266. By proving that

he or she had satisfied that test, a claimant would become

entitled to benefits. See id. Under that statutory scheme, the

court held that the agency could not simply deny benefits

on the ground that “[y]our only contacts were your union

and two employers[,]” without telling the claimant what fur-

ther effort would be required. Id. (internal quotation marks

omitted).

The difference in this case is that a taxpayer’s right

to an installment agreement does not depend solely on the

efforts of the taxpayer. The department must compare what-

ever terms the taxpayer might offer with other collection

alternatives to determine whether the taxpayer’s terms make

collection easier. That comparison involves cost and risk fac-

tors over which the taxpayer has little or no control. Although

the legislature could make the policy decision to require the

director or the department to disclose the criteria to tax-

payers or otherwise make installment negotiations more pre-

dictable, the court has found no indication in the TBOR or

other statutes that the legislature has done so to date.

the department to promulgate rules. 19 OTR at 287-89 (ORS 314.280(1) “clearly

states that department action is to be ‘under rules and regulations adopted by

the department.’ ”). Second, U.S. Bancorp, like Trebesch, involved “decentralized

decision-making done by auditors,” as opposed to the highly centralized decision-

making process for installment agreements.

Cite as 23 OTR 155 (2018) 187

5. Conclusions

The term “facilitate collection,” in context, expresses

a complete legislative policy requiring the director to offer

an installment agreement if an agreement will make col-

lecting the tax easier for the department than by other

means. This determination requires the director to weigh

costs and benefits, not to make policy. Based on the record,

only a small group of high-level employees can adjudicate

these determinations, so there is no clear need for rules to

ensure uniformity. Although rules might help the public pre-

dict the circumstances in which the department is likely to

approve an installment agreement, nothing in the text, con-

text or legislative history shows that the legislature wanted

the department to address any such concern through rules.

Accordingly, as to taxpayer’s second claim, the court denies

taxpayer’s motion for summary judgment and grants the

department’s cross-motion.

D. Taxpayer’s Fourth and Fifth Claims: Notice During

Collections Process

The court considers taxpayer’s fourth and fifth

claims together. In these claims, taxpayer asserts that the

department failed to notify him of his rights to appeal the

director’s determination regarding his installment agree-

ment, and to be represented by an attorney during the col-

lection process, respectively.18 The department asserts that

it notified taxpayer of both rights when it sent taxpayer its

publication entitled “Your Rights as an Oregon Taxpayer”

(the Publication). Thus, the disagreement in both claims is

reduced to the Publication’s level of specificity.

Before it can consider the merits, the court must

address three procedural issues.

1. Jurisdiction over Claims under ORS 305.860 and

ORS 305.875

In Christensen I, the court cautioned:

18

In his amended complaint, taxpayer described his fifth claim broadly as

arising from the department’s failure to “inform him of his rights under ORS

305.875.” On summary judgment, however, taxpayer argued only that the depart-

ment had failed to notify him of his right to be represented by an attorney during

the collections process.

188 Christensen II v. Dept. of Rev.

“The relevant analysis is whether this court has juris-

diction over claims arising under particular statutes, not

general subject matters. This caution even applies to the

Taxpayer Bill of Rights, as other provisions may or may

not be within the court’s jurisdiction, depending on the

analysis.”

22 OTR at 392 (emphasis in original). Taxpayer’s claims

under ORS 305.860 and ORS 305.875 do not relate to his

claims under ORS 305.890(1), so the court must consider

whether it has subject matter jurisdiction over the new

claims.19

The Tax Court’s jurisdiction is granted in ORS

305.410:

“[T]he tax court shall be the sole, exclusive and final judi-

cial authority for the hearing and determination of all

questions of law and act arising under the tax laws of this

state.”

In Sanok v. Grimes, 294 Or 684, 697, 662 P2d 693 (1983),

the Supreme Court identified two boundaries around Tax

Court jurisdiction. First, “questions which must be resolved

in order to decide taxability or the amount of tax do arise

under the tax laws.” Id. Second, “a precondition to taxation

does not arise under the tax laws if jurisdiction to decide

that precondition has been affirmatively located in another

court or if a decision on the precondition has substantial

non-tax consequences.” Id. The Supreme Court summed up

its holding by stating: “[A] claim is not one ‘arising under

the tax laws’ unless it has some bearing on tax liability.”

Id. at 701.

As in Christensen I, taxpayer’s claims under ORS

305.860 and ORS 305.875 are not squarely within the

court’s jurisdiction under the Sanok analysis because they

relate to collection matters rather than to “questions that

might arise before a tax liability is determined” or is “final.”

See Perkins v. Dept. of Rev., 22 OTR 370, 374, 377 (2017).

However, applying Perkins and Christensen I, the court

19

Neither party has addressed subject matter jurisdiction, but the court is

required to consider it. TCR 21 G(4); see Work v. Dept. of Rev., 22 OTR 396, 410

(2017) (“Courts are required to consider sua sponte the existence or not of subject

matter jurisdiction, and subject matter jurisdiction can be raised at any time.”).

Cite as 23 OTR 155 (2018) 189

next analyzes the nature of the claim based on the relief

requested. 22 OTR at 375 (citing Sanok, 294 Or at 697-98

n 22). Taxpayer requests:20

“An order requiring [the department] to notify taxpayers,

in the statement of taxpayer rights required to be pub-

lished under ORS 305.860, that a Department of Revenue

installment agreement determination is appealable to the

Oregon Tax Court [and] * * * that taxpayers have the right

to be represented by an attorney during the collection pro-

cess.” (Brackets added.)

For purposes of its jurisdiction analysis, the court

reads the foregoing request as relating to taxpayer specifically,

rather than literally to all taxpayers. Even so, the requested

order would not affect taxpayer’s tax liability or the amount

of his tax. However, this is not a case in which the statutory

context points to jurisdiction in the circuit courts. Cf. Perkins,

22 OTR at 372-74. Rather, as decided in Christensen I, the cir-

cumstances of the specific claims that might arise under ORS

305.860 and ORS 305.875 are clearly within the Tax Court’s

jurisdiction. ORS 305.860 provides that the director must

prepare and distribute an explanation of taxpayer rights

“in all billing or collection notices, all notices of assessment

or deficiency and all notices of refund adjustment or denial

sent to the taxpayer.” ORS 305.860(2) (emphasis added). ORS

305.875 sets out the rights that taxpayers have in meetings

with the department, including “audits, conferences, inter-

views and any other meeting or communication between

the taxpayer and the department.” ORS 305.875 (emphasis

added). Accordingly, these statutes do not govern solely col-

lections, although the matter presently before the court is one

of collection. Cf. ORS 321.600 (discussed in Perkins, 22 OTR

at 376). In addition, the legislative history supports a conclu-

sion that the legislature generally understood the Tax Court

to have jurisdiction over the TBOR. Christensen I, 22 OTR

at 391-92. The court concludes it has jurisdiction to consider

taxpayer’s claims under ORS 305.860 and ORS 305.875.

20

For the reasons stated in Christensen I, the court rejects as overbroad tax-

payer’s further request for a “declaratory judgment stating that ORS 305.890

and the other provisions of the Oregon Taxpayer Bill of Rights fall within the

subject matter jurisdiction of the Tax Court.” See Christensen I, 22 OTR at 392

(“[N]ot everything within the Taxpayer Bill of Rights is necessarily within this

court’s jurisdiction.”).

190 Christensen II v. Dept. of Rev.

2. Whether ORS 305.860 and ORS 305.875 Are

Properly Raised

The court now addresses whether taxpayer prop-

erly raised his fourth and fifth claims for the first time in

the Regular Division. The department points out that in the

Magistrate Division, taxpayer “appealed from the depart-

ment’s [installment payment] determination * * *, not the

collection notices that preceded that determination.”

Generally, because proceedings in the Regular

Division are de novo, ORS 305.425(1), plaintiffs in the

Regular Division may proceed on new facts or theories not

presented to the Magistrate Division. See Work v. Dept. of

Rev., 22 OTR 396, 412 (2017). However, the statutes pro-

viding for review in the court contemplate adjudication of

a “matter” first in the Magistrate Division. Freitag v. Dept.

of Rev., 19 OTR 144, 148 (2006); ORS 305.501(1). In this

case, taxpayer clarified his position and added new claims

in his first amended complaint, filed in the wake of the

court’s analysis in Christensen I. The court hesitates to dis-

miss taxpayer’s purportedly new claims in a case with little

prior guidance on the extent of the court’s jurisdiction or the

nature of a taxpayer’s rights under the TBOR, especially

when there is no indication that he is attempting to frus-

trate the legislative goal of having disputes first heard in

the Magistrate Division. Cf. Fields v. Dept. of Rev., 19 OTR

547, 549-50 (2009). However, the court need not decide this

issue because, even if taxpayer properly raised these claims

in the Regular Division, he is not aggrieved.

3. Taxpayer Is Not Aggrieved by the Department’s

Actions Under ORS 305.860 and ORS 305.875

The court now considers whether taxpayer has been

aggrieved by the department’s failures to notify him of his

right to appeal from the installment agreement determina-

tion and his right to counsel during collection proceedings.

The department points out that taxpayer “provides no expla-

nation why such a finding [would] afford[ ] him any relief

in the tax court.” If taxpayer is not aggrieved, he may not

maintain an action in the court. See Parks Westsac L.L.C.

v. Dept. of Rev., 15 OTR 50, 51 (1999) (“If taxpayer is not

Cite as 23 OTR 155 (2018) 191

aggrieved within the meaning of [ORS 305.275], then tax-

payer does not have standing; and, therefore, the court may

not exercise its jurisdiction over the claim.”).

Taxpayer obviously is dissatisfied with his notices

from the department. However, “[t]o be ‘aggrieved’ is to be

something more than just dissatisfied with a result.” NW

Medical Lab. v. Good Samaritan Hospital, 309 Or 262, 268,

786 P2d 718 (1990). Moreover, taxpayer’s status as a tax-

payer does not automatically confer standing on him to chal-

lenge the actions of the department. Id.; see also Brummell

v. Dept. of Rev., 4 OTR at 172 (quoting Nicholas v. Lawrence,

161 Va 589, 592-93, 171 SE 673 (1933)). Taxpayer must “have

an interest in the outcome—an interest beyond that shared

with the general public—such as pecuniary or other interest

peculiar” to him. NW Medical Lab., 309 Or at 268.

Typically, aggrievement in the Tax Court is pre-

mised on a pecuniary interest, namely the imposition or

amount of tax. See, e.g., Paris v. Dept. of Rev., 19 OTR 519,

521-22 (2008); Sherman v. Dept. of Rev., 17 OTR 322, 323

(2004); Parks Westsac L.L.C., 15 OTR at 52. Taxpayer has no

such pecuniary interest in his fourth and fifth claims. Nor

is taxpayer otherwise aggrieved by any omissions or inade-

quacies in the Publication.

The fact is that taxpayer appealed the director’s

adverse installment agreement determination, and he

was represented by counsel during the collection process.

Taxpayer points to no facts showing that he was damaged by

omissions in the Publication. His interest in his fourth and

fifth claims does not go beyond a general concern to ensure

that the department is following the law, a concern equally

shared by the general public but insufficient to confer stand-

ing on him. NW Medical Lab., 309 Or at 268. As to taxpay-

er’s fourth and fifth claims, without reaching the merits, the

court denies taxpayer’s motion for summary judgment and

grants the department’s cross-motion.

V. CONCLUSION

As to taxpayer’s first claim, there is no question

that the director then in office failed to properly delegate

authority under ORS 305.057 before having employees of the

192 Christensen II v. Dept. of Rev.

department consider taxpayer’s application for an install-

ment agreement. Accordingly, although the court denies

injunctive relief, the court will declare taxpayer’s right to

have an application for an installment agreement consid-

ered by the director or a properly designated employee.

However, because taxpayer prevailed on this claim and may

now seek a new agreement, the court does not consider his

third claim, that department employees erred in consider-

ing taxpayer’s 2015 application for an installment agree-

ment. The court dismisses taxpayer’s second claim because

the court finds that the legislature did not intend to require

the department to promulgate administrative rules before

determining whether an installment agreement facilitates

collection for purposes of ORS 305.890. The court also dis-

misses taxpayer’s fourth and fifth claims because there is no

evidence that taxpayer was aggrieved by any deficiency in

the department’s collection notices under ORS 305.860 and

ORS 305.875. Now, therefore,

IT IS ORDERED that Plaintiff’s motion for sum-

mary judgment is granted as to his request for declara-

tory judgment pursuant to claim 1, and denied in all other

respects.

IT IS FURTHER ORDERED that Defendant’s

cross-motion for summary judgment is granted as to claims

2, 4, and 5, and denied in all other respects.