Full Opinion (html_with_citations)

                                       673

     Argued and submitted November 17, judgment of Tax Court affirmed
                           December 30, 2022


                        Grant E. PICKER
                      and Patricia A. Picker,
                           Appellants,
                                v.
                  DEPARTMENT OF REVENUE,
                           Respondent.
                     (TC 5428) (SC S069235)
523 P3d 109

     Taxpayers appealed to the Tax Court from the Department of Revenue’s
assessment of income tax. A taxpayer who appeals such an order ordinarily must
prepay the disputed amount to the department, but ORS 305.419(3) creates an
exception when payment by the taxpayer would constitute an undue hardship.
Taxpayers moved to stay the payment, but the Tax Court found their supporting
affidavit insufficiently detailed and required them to produce additional docu-
mentation. When taxpayers failed to provide the documentation or to pay the
assessed tax, the Tax Court dismissed the appeal. Taxpayers appealed the dis-
missal to the Supreme Court. Held: (1) The Tax Court had found that taxpayers
had failed to establish undue hardship, and so dismissal was justified; and (2) the
Tax Court did not err in interpreting “undue hardship” in the statute to mean
financial hardship.
    The judgment of the Tax Court is affirmed.



    On appeal from the Oregon Tax Court.
    Robert T. Manicke, Judge.
   David E. Smith, Spooner & Much, PC, Salem, argued the
cause and filed the briefs for appellants.
   Patrick L. Rieder, Assistant Attorney General, Salem,
argued the cause for respondent. Inge D. Wells, Assistant
Attorney General, filed the brief. Also on the brief were
Ellen F. Rosenblum, Attorney General, Benjamin Gutman,
Solicitor General, Darren Weirnick, Assistant Attorney
General, and Patrick L. Rieder, Assistant Attorney General.
  Before Balmer, Flynn, Duncan, Nelson, Garrett, and
DeHoog, JJ.*
______________
    * Walters, C. J., did not participate in the consideration or decision of this
case.
674                                Picker v. Dept. of Rev.

  BALMER, J.
  The judgment of the Tax Court is affirmed.
Cite as
370 Or 673
 (2022)                                                 675

           BALMER, J.
         This appeal presents the question whether the
Oregon Tax Court erred when it dismissed taxpayers’ appeal
for failure to either pay an assessed income tax or show that
doing so would constitute an undue hardship. ORS 305.419.
For the reasons that follow, we affirm.
         Under ORS 305.419, a taxpayer seeking to appeal
a determination of income tax deficiency to the Regular
Division of the Tax Court must, on or before filing a com-
plaint seeking a refund, pay the amount assessed by the
Department of Revenue (department), plus interest and pen-
alties. ORS 305.419(1).1 The prepayment requirement does
not apply, however, if the taxpayer shows that paying the
tax would constitute an “undue hardship.” ORS 305.419(3).
         The Department of Revenue assessed taxpayers
$5,595 for deficient taxes, plus additional penalties and
interest, for tax year 2013. Taxpayers first appealed that
determination to the Magistrate Division of the Tax Court.
While the case was pending there, the parties jointly moved
to hold the proceedings in abeyance pending the outcome
of an Internal Revenue Service audit reconsideration. The
parties also entered into an agreement extending the lim-
itation period for the department to make “any adjustment
necessary to arrive at the correct amount of Oregon tax-
able income and Oregon tax liability.” The limitation period
expired April 30, 2019, and no new or modified assessment
was sent.
        After the Magistrate Division proceedings were
reinstated, taxpayers contended that the extension agree-
ment voided the original assessment, and so the absence of
a new assessment meant the court should grant summary
judgment in their favor. The department countered that
the original assessment remained valid and in effect. The
magistrate agreed with the department and denied tax-
payers’ motion, and later denied taxpayers’ two motions for
reconsideration.

   1
     To the extent that a taxpayer ultimately succeeds before the Tax Court, the
department must refund the appropriate amount with interest. ORS 305.419(4).
676                                            Picker v. Dept. of Rev.

        After taxpayers repeatedly refused to comply with
the department’s request for production of documents, the
department moved to dismiss. The magistrate granted that
motion, and taxpayers appealed that decision by filing a
complaint with the Tax Court Regular Division.
         Taxpayers’ complaint sought relief from the 2013
assessment of deficient income taxes.2 Included with the
complaint was a motion by taxpayers to stay the statutory
requirement to pay the deficiency, together with an affida-
vit regarding their finances to support their claim that pay-
ment would impose an undue hardship. See generally ORS
305.419(3) (taxpayer may seek stay of duty to pay tax and
penalties by filing affidavit alleging undue hardship); Tax
Court Rule (TCR) 18 C(3) (setting out procedures for undue
hardship claim); see also TCR 18 C(3)(a) (affidavit must “set[ ]
forth the specific facts and circumstances which establish
undue hardship”). The affidavit included taxpayers’ claimed
account balances for certain loans, but omitted much of the
information required by the Tax Court’s form affidavit. The
department objected to a stay. See TCR 18 C(3)(b) (authoriz-
ing objections).
         The Tax Court then entered an order stating its
finding that “additional proof is required to enable the court
to decide” whether payment would be an undue hardship.
See TCR 18 C(3)(b) (providing that, if “the court cannot
determine from the plaintiff’s affidavit whether payment
of the tax * * * would be an undue hardship, the court may
require the plaintiff to submit further proof of hardship in
writing”). The order listed the additional documents that
the taxpayers would need to file (bank statements, loan
documents, credit card statements, etc.), and the court gave
taxpayers until December 15, 2021—roughly 45 days—to do
one of the following:
   “either (1) file with the court and serve on [the depart-
   ment] the new, supplemental Affidavit of Income, Assets,
   and Expenses, with all attached copies and statements; or
   (2) pay to [the department] the amount of tax, penalties
   and interest assessed. If this deadline is not met, the court

   2
     Taxpayers also sought relief from a 2014 assessment. The Tax Court dis-
missed that claim without prejudice, and it is not at issue here.
Cite as
370 Or 673
 (2022)                                      677

   will entertain a motion by [the department] to dismiss [tax-
   payers’] appeal.”
(Footnote omitted.)
        Taxpayers neither submitted the documentation
nor paid the assessment. They instead asked the court to
rule on the merits before addressing their motion to stay,
adding that they believed that the department had treated
them unfairly.
          On December 14, 2021, the department sent the Tax
Court a letter asking the court, in the event that taxpayers
failed to submit the required additional documentation, to
“ ‘find no undue hardship’ ” and dismiss their complaint with
prejudice.
         On December 22, 2021, the Tax Court entered the
order of dismissal at issue here. Construing the depart-
ment’s December 14 letter as a motion to dismiss, the court
ordered:
      “The court finds that [taxpayers] have failed to comply
   with the court’s [prior] Order because they have neither
   provided the listed financial substantiation nor paid any
   tax, penalty or interest assessed for tax year[ ] 2013 * * *.
       “As to tax year 2013, the court will grant [the depart-
   ment’s] December 14 motion to dismiss in part and deny the
   motion in part. The court will grant the motion to the extent
   of dismissing the appeal of tax year 2013 with immediate
   effect. * * * The court’s [prior] Order directed [taxpayers]
   to exercise one of two options on or before December 15,
   2021, and [taxpayers] did not avail themselves of either
   one. The court will dismiss [taxpayers’] complaint as to tax
   year 2013 with prejudice.”
The Tax Court later entered judgment accordingly.
         Taxpayers have now appealed to this court. ORS
305.445. “The scope of the review” of the Tax Court’s deci-
sion is “limited to errors or questions of law or lack of sub-
stantial evidence in the record to support the tax court’s
decision or order.”
Id.
         The legislature has expressly required that—subject
to a limited exception—a taxpayer appealing an income tax
678                                         Picker v. Dept. of Rev.

issue to the Regular Division must first pay the department
the disputed amount. ORS 305.419(1) provides, in part:
       “Except as provided in subsection (3) of this section,
   in any appeal from an order, act, omission or determina-
   tion of the Department of Revenue involving a deficiency
   of taxes imposed upon or measured by net income, the tax
   assessed, and all penalties and interest due, shall be paid
   to the department on or before the filing of a complaint with
   the regular division of the Oregon Tax Court under ORS
   305.560[.] * * * The complaint shall be filed as a claim for
   refund.”
(Emphasis added.) The required payment is mandatory
and jurisdictional unless the exception set out in subsec-
tion (3) applies.
Id.
 (the tax assessed “shall be paid”); see
Leffler Industries v. Dept. of Rev.,
299 Or 481, 486
,
704 P2d 97
 (1985) (“The legislature clearly stated [in ORS 305.419]
that the payment of the tax due was a prerequisite to the
Tax Court’s ability to hear the case.”).
       The exception is when a taxpayer shows that pay-
ment would cause undue hardship. ORS 305.419(3) provides:
       “Where payment of the tax, penalty and interest would be
   an undue hardship, plaintiff may file an affidavit alleging
   undue hardship * * *. A plaintiff’s failure to file an affidavit
   alleging hardship is not grounds for dismissal of the com-
   plaint, provided the plaintiff files the affidavit within 30
   days after receiving notice of lack of an affidavit alleging
   undue hardship from the court. If the tax court finds undue
   hardship, the tax court judge may stay all or any part of
   the payment of tax, penalty and interest required under
   subsection (1) of this section. If the tax court judge finds no
   undue hardship, the tax court judge may grant the plain-
   tiff up to 30 days from the date of determination to pay
   the tax, penalty and interest. Failure by the plaintiff to pay
   the tax, penalty and interest or to establish undue hardship
   will be cause for dismissing the complaint.”
(Emphases added.)
         Taxpayers initially contend that the Tax Court
did not follow ORS 305.419(3) when it dismissed their com-
plaint. In taxpayers’ view, the Tax Court cannot dismiss
without expressly and affirmatively finding that there was
Cite as
370 Or 673
 (2022)                                 679

no undue hardship. Taxpayers did not preserve the issue,
but they contend that the error is apparent on the face of the
record.
         We are not persuaded by taxpayers’ interpretation
of the statute. As a matter of law, the burden of proof to
“establish undue hardship” lay on the taxpayers. Absent
payment, it is a taxpayer’s “[f]ailure * * * to establish undue
hardship” that justifies dismissal.
Id.
         Here, the Tax Court reviewed taxpayers’ motion and
affidavit in support of their claim of undue hardship. The
court explained its questions about taxpayers’ finances and
required them either to submit additional documentation—
which it specifically identified—or to pay the assessed taxes,
penalties, and interest as required by ORS 305.419(1).
         In reviewing the Tax Court’s decision, we presume
that it made findings of fact consistent with its resolution
of the case. See, e.g., State v. Ehly,
317 Or 66, 75
,
854 P2d 421
 (1993) (“If findings of historical fact are not made on
all pertinent issues and there is evidence from which such
facts could be decided more than one way, we will presume
that the facts were decided in a manner consistent with the
court’s ultimate conclusion.”). By requiring taxpayers to
submit additional documentation, the Tax Court necessar-
ily found that taxpayers’ existing documentation failed to
establish undue hardship. If taxpayers had shown undue
hardship, then the court would not have needed additional
documentation. Taxpayers do not assert that the court
lacked substantial evidence to make that finding.
          Because the Tax Court found that taxpayers had
“[f]ail[ed] * * * to establish undue hardship,” and because it
is undisputed that taxpayers did not pay the assessed taxes,
penalties and interest, the court’s decision dismissing their
complaint was justified. ORS 305.419(3).
          Taxpayers alternatively argue that the Tax Court
erred in limiting its consideration of “undue hardship” to
financial hardship. They seek a more expansive interpreta-
tion of that term, one that equates undue hardship with any
“morally wrong” suffering. In their view, the department had
committed to reassess the tax by a certain date but failed
680                                   Picker v. Dept. of Rev.

to do so, and thus taxpayers maintain that the department
“violat[ed] its promise” and “treated [them] unfairly.” That,
they contend, constitutes an undue hardship independent of
any impact on their finances.
         We need not determine the exact scope of the term
“undue hardship,” however, because the statutory context
shows that the legislature referred only to financial hard-
ship that would be caused by payment of the assessed tax.
ORS 305.419(3) does not refer to “undue hardship” in the
abstract; rather, it requires that “payment of the tax * * *
would be an undue hardship.” (Emphasis added.) See also
TCR 18 C(3)(b) (plaintiff’s affidavit must show that “pay-
ment of the tax * * * would be an undue hardship” (empha-
sis added)). Undue hardship must result from making that
payment. We conclude that the Tax Court correctly declined
to adopt a more expansive meaning for that term. And, it
follows, the Tax Court did not err in dismissing taxpayers’
complaint.
        The judgment of the Tax Court is affirmed.