(2)(a) The taxpayer shall report to the department any change in the taxpayer’s taxable income that is subject to tax by this state or any change in the taxpayer’s tax liability paid to or owing this state because:

(A) The Internal Revenue Service or other competent authority has changed or corrected the amount of a taxpayer’s taxable income, tax credit or other amount taken into account in determining the taxpayer’s tax liability as reported on a federal income tax return or an income tax return of another state for any taxable year; or

(B) The taxpayer:

(i) Files an original or amended return that is accepted by the Internal Revenue Service or the taxing authority of another state; or

(ii) Is assessed tax by the Internal Revenue Service or the taxing authority of another state for the failure to file a return as required.

(b) In the case of a change or correction made by the Internal Revenue Service or by the taxing authority of another state, the report shall either concede the accuracy of the determination or state wherein the taxpayer believes it to be erroneous. The report may be treated by the department as a claim for refund pursuant to ORS 314.415 if the department determines that the taxpayer’s correct Oregon tax liability is a reduction from the taxpayer’s Oregon tax liability prior to the filing of the report. Notwithstanding the limitations of ORS 314.415, a claim for refund under this paragraph shall be deemed timely if received by the department within two years after the federal or other state correction was made.

(c) In the case of a taxpayer filing an original or amended federal or other state return that reports a change in the taxpayer’s taxable income that is subject to tax by this state or that results in a change in the taxpayer’s tax liability paid to or owing this state, the report required by this subsection shall be an amended Oregon return. The taxpayer shall file the amended return with the department within 90 days thereafter.

(3) For purposes of this section:

(a) A change or correction of a taxpayer’s taxable income is deemed to be made on the date of the audit report making the change or correction; and

(b) The date on which an original or amended return is accepted by the Internal Revenue Service or other state taxing authority is the date the original or amended return is filed if the return is subsequently accepted by the Internal Revenue Service or other state taxing authority.

(4) The provisions of ORS 305.305 shall constitute the exclusive remedy of a person whose notice of deficiency or assessment is based upon a change or correction of the person’s taxable income under this section. [1957 c.632 §11 (enacted in lieu of 316.565 and 317.380); 1963 c.509 §1; 1985 c.602 §3; 1989 c.414 §7; 1997 c.100 §2; 1999 c.74 §1; 2001 c.9 §4]