Remember last fall's Oregon tax amnesty? Under this program, for a month and half or so, people who hadn't filed their state income tax returns, or who had filed such returns with erroneous items in their favor, could come clean without penalty. Not only would the state waive any penalties, but it would also cut the usual interest rate on the delinquent taxes (6% at the time) in half. The amnesty was the brainchild of the legislature (Ginny Burdick presiding), midwifed by Sallie Mae (which is now a private firm whose debt collection subsidiary administered it).

One of the features of amnesty that we blogged about was a wicked 25% penalty that was going to apply to those who could have taken advantage of amnesty, but didn't. That was the "stick" that was supposed to go along with the "carrot" of amnesty.

The new penalty isn't absolute, though -- there are still circumstances in which the state Department of Revenue can waive it. And that bureau has now published proposed rules explaining when it might show some mercy. The rules are here, and according to that draft, they're holding a hearing on them today.

The escape hatch for those who failed to play along with amnesty seems pretty narrow: The penalty will be waived "if the taxpayer demonstrates, to the department’s satisfaction, that the failure to participate in the amnesty program was due to circumstances beyond their control." If the Oregon tax debt arises out of a federal tax audit, in some cases the 25% state penalty won't apply unless the IRS also asserts penalties.

More important than the penalty waiver point, though, are the overall results of the program. According to reports out of Salem last week, it raised $32 million, which was twice what was budgeted. Was that in cash, or promises to make installment payments in the future? And how many deadbeat taxpayers did it flush out of the bushes? Which types of taxpayers benefited most from the forgiveness of penalties and half the interest?

It would be interesting to see whether the beneficiaries were really the hapless moms and pops shown in the TV commercials touting the plan. Based on the harsh comments I received for even questioning the wisdom of amnesty back in September, I got the strong impression that the taxpayers who would really save the most dough from it were big corporations.