The opinion
OPINION ON COST BILL
Subsequent to the trial in this case, plaintiffs submitted their cost bill, including a claim for reasonable attorney fees and expert witness fees. Defendant submitted timely objections supported by memorandum. Counsel for plaintiffs has submitted memorandum and defendant additional points and authorities.
The objections and arguments submitted make it appropriate for the court to review the awarding of attorney fees under ORS 305.490(2). 1 Under that statute, the court is *73 given discretionary authority to allow both reasonable attorney fees and reasonable expenses to a prevailing individual taxpayer. The statute does not provide guidelines or standards for the exercise of the court’s discretion. Defendant points out that the statutory authority is similar to the authority granted the Court of Appeals under ORS 183.495. Brown v. Adult and Family Services, 293 Or 6 , 643 P2d 1266 (1982). Defendant argues that the guidelines established by the Court of Appeals for awarding attorney fees under ORS 183.495 should be followed by this court in awarding attorney fees under ORS 305.490(2).
There is a basic difference between the Tax Court and the Court of Appeals. The statute which controls the authority of the Court of Appeals to reverse or remand a final order of a state agency, ORS 183.482, provides different standards for review. See Van Gordon v. Ore. State Bd. of Dental Examiners, 63 Or App 561 , 666 P2d 276 (1983). In addition, it should be recognized that the agency actions reviewed by the Court of Appeals cover a wide variety of governmental powers and not merely the assessment of taxes. The policy reasons for awarding attorney fees in a dispute over a license revocation may be entirely different from the reasons for awarding attorney fees in a dispute over income taxes.
The legislative history of ORS 305.490(2) provides little guidance to the court for the exercise of its discretion. The initial proposal found in House Bill 1002 in the 1971 regular session provided that the Tax Court “shall” allow attorney fees and expenses to a prevailing party in an income tax dispute. That section was subsequently amended and the “shall” was changed to “may,” thereby making the award discretionary. It may be inferred from this change that the legislature did not intend that attorney fees be awarded in every case. When or why fees should or should not be awarded are questions left to the court to answer. While attorney fees and reasonable expenses have been awarded in several cases, no standards have been established by the court in those cases.
Following the example of the Court of Appeals in Van Gordon v. Ore. Bd. of Dental Examiners, supra, the court believes that the Department of Revenue and the public will benefit by now setting forth guidelines for the awarding of *74 attorney fees and expenses under ORS 305.490(2). It is emphasized that these are guidelines only and may be modified, enlarged or deleted as the circumstances of the cases may indicate appropriate.
Generally the court will award attorney fees under ORS 305.490(2) in cases where it appears that the Department of Revenue has taken an arbitrary or unreasonable position in interpreting the law or construing the facts. Likewise, where the law, regulation or tax forms are ambiguous or unclear, the court will award attorney fees and expenses since the resulting clarification is for the benefit of the public in general. The court will also be inclined to grant attorney fees in cases where it appears just and equitable.
Generally the court will not award attorney fees and expenses where: (a) the taxpayer fails to furnish complete and adequate information to the department as requested or required by law, (b) the taxpayer is uncooperative or lacking in candor in attempting to bring all relevant facts to light and resolve the dispute according to law, or (c) where the taxpayer has failed to maintain adequate records. Likewise, the court will decline to award attorney fees or other expenses where it appears that the taxpayer has been unreasonable, acted unlawfully or in any other circumstance which appears to justify the denial of such awards.
The amount to be awarded as reasonable attorney fees will depend upon the circumstances in each case. In addition to the factors normally considered as guides in determining the reasonableness of a fee, 2 the court will consider the extent to which counsel has been of assistance to the court in making a decision.
In this case the taxpayers were seeking a refund of $1,693.64, plus interest. Plaintiffs’ claim for attorney fees based on time records amounts to $3,525.14. Counsel for plaintiffs commenced representation after the Department of Revenue hearing. In light of the nature of the case, the amount of tax involved, and the other circumstances, the court finds that a reasonable attorney fee in this case is $3,000. Plaintiffs’ claimed costs and disbursements in the amount of $181.64 and *75 expert witness fee in the amount of $543.25 are allowed. Plaintiffs’ claim for reasonable expenses for food, lodging and travel in the amount of $200.23 are not allowed. The court views the “reasonable expenses” language of ORS 305.490(2)(b) as being intended to reimburse items similar to those defined by ORCP 68A.(2). 3
Judgment will be entered in accordance with the above decision.
“(2) If, in any proceeding under this section involving taxes upon or measured by net income in which an individual taxpayer is a party, or involving gift or inheritance taxes, the court grants a refund claimed by the executor or taxpayer or denies in part or wholly an additional assessment of taxes claimed by the department to be due from the estate or taxpayer, the court may allow the taxpayer, in addition to costs and disbursements:
“(a) Reasonable attorney fees for the proceeding under this section and for the prior proceeding in the matter, if any, before the department; and
“(b) Reasonable expenses as determined by the court. Expenses include accountant fees and fees of other experts incurred by the executor or individual taxpayer in preparing for and conducting the proceeding under this section and the prior proceeding in the matter, if any, before the department.
“Payment of attorney fees or reasonable expenses shall be made by the department in the manner provided by law for the payment of income tax refunds.”
See Oregon State Bar Disciplinary Rule DR 2-106(b).
ORCP 68A.(2) defines costs and disbursements as “reasonable and necessary expenses incurred in the prosecution or defense of an action other than for legal services, and include the fees of officers and witnesses; the necessary expenses of taking depositions; the expense of publication of summonses or notices, and the postage where the same are served by mail; the compensation of referees; the necessary expense of copying of any public record, book, or document used as evidence on the trial; ***."