(a) The tax has been delinquent for seven or more years;

(b) All reasonable efforts have been made to effect collection;

(c) The taxpayer cannot be located or is dead; and

(d) The tax is wholly uncollectible.

(2) The department shall offer to suspend collection of an unpaid tax imposed by laws of the State of Oregon that is collected by the department, including any penalty or interest applicable to the tax, if the department determines that the individual liable for the debt:

(a) Has income that does not exceed 200 percent of the federal poverty guidelines based on the individual’s household size and household members;

(b) Has less than $5,000 in assets; and

(c) Has income solely from a source that is exempt from garnishment under ORS chapter 18.

(3) The department may cancel any tax imposed by laws of the State of Oregon that is collected by the department or any portion of the tax assessed against a person, including any penalty and interest that has not been collected, if the department determines that the administration and collection costs involved would exceed the amount that can reasonably be expected to be recovered.

(4) When taxes are canceled under subsection (1) or (3) of this section, the department shall make an order canceling the tax, penalties and interest. The order shall be filed in the records of the department. Upon making the order, the department also shall cause to be canceled or released any lien of record of the tax, penalties and interest in the counties that may have been filed and entered therein.

(5) When collection of taxes is suspended under subsection (2) of this section:

(a) The department shall continue to charge interest on the taxes for which collection has been suspended.

(b) The taxpayer may make voluntary payments of unpaid tax. Voluntary payment of unpaid tax under this subsection does not affect the taxpayer’s eligibility for suspension of collection under this section or allow the department to resume collection of any unpaid tax.

(c) The department may file a lien against the taxpayer’s property.

(d) The department may resume collection as described in subsection (7) of this section if the taxpayer incurs additional unpaid tax during the period of suspended collection.

(6) Nothing in this section limits the department’s authority to offset state or federal payments, including tax refunds, against unpaid taxes that have been suspended under subsection (2) of this section.

(7)(a) When collection of taxes is suspended under subsection (2) of this section, the department shall review annually the taxpayer’s eligibility for suspension of collection activities and ensure that the taxpayer continues to meet all requirements listed in subsection (2) of this section.

(b) If the department determines that a taxpayer no longer meets the requirements listed in subsection (2) of this section, the department may resume collection of any unpaid tax. Not less than 30 days before the department resumes collection under this subsection, the department shall provide written notice to the taxpayer that the taxpayer no longer qualifies for suspension of collection under this section and that the department will resume collection of the unpaid tax.

(8) The department may write off the debt on its accounts under ORS 293.240 for any tax period for which collection has been suspended under subsection (2) for more than three tax years.

(9) The department shall by rule establish policies and procedures for the administration of this section. [1965 c.293 §2; 1973 c.402 §5; 1989 c.934 §2; 2003 c.46 §2; 2015 c.643 §3]