I am being audited by the Oregon Department of Revenue; what to do?

My opinion is that the Oregon Department of Revenue (ODR) is much more difficult that IRS when it comes to audits. Auditors are more detailed in terms of what constitutes substantiating documentation (items that establish income or expense) and more often than not will weight evidence heavily in the State’s favor.

I typically recommend for any larger amount of taxes that are generated out of an audit that is incorrect, to appeal to the Oregon Tax Court Magistrate Division. Here you will get someone who will better be able to decide the issues in the tax return fairly.