IN THE OREGON TAX COURT MAGISTRATE DIVISION Income Tax
DANIEL KAHL, ) ) Plaintiff, ) TC-MD 230011R ) v. ) ) DEPARTMENT OF REVENUE, ) State of Oregon, ) ) Defendant. ) DECISION
Plaintiff appealed Defendant’s Notice of Deficiency Assessments dated October 11,
2022, for the 2015 and 2016 tax years. In its amended Answer, Defendant sought to increase the
deficiencies for both years based on revised analyses prepared after discovery.
Based on some common business ownership interests, a joint trial was held with Nidal
Kahl and Panayiota Kahl v. Department of Revenue, TC-MD 230009R, and Edward Kahl v.
Department of Revenue, TC-MD 230010R. Trial was held in the courtroom of the Oregon Tax
Court from January 27, 2025, through January 31, 2025, and on February 5, 2025. Plaintiff did
not appear for trial as scheduled.1 The court scheduled an additional trial date on May 20, 2025,
so that Defendant could present evidence supporting the increased deficiency asserted in its
Amended Answer. Plaintiff did not appear for the continued trial date, and thus the trial
consisted of Defendant’s evidence plus cross-examination of its witness.
Hertsel Shadian, Attorney at Law, represented Nidal and Panayiota Kahl, and co-
represented Plaintiff. Shawn Bargouti, Certified Public Accountant, represented Edward Kahl
and co-represented Plaintiff. Plaintiffs also called Defendant’s auditor, Michelle Warren
1 In this Decision, Plaintiff used singularly refers to Daniel Kahl, and Plaintiffs used plurally refers to Daniel Kahl, Nidal Kahl, Panayiota Kahl, and Edward Kahl.
DECISION TC-MD 230011R 1 (Warren), as an adverse witness. Patrick Rieder and Sam Zeigler, Assistant Attorneys General,
represented Defendant and called Warren as a witness. Plaintiffs’ Exhibits PE 1 to PE 3763 and
PR 1 to PR 13 were admitted into evidence. Defendant’s Exhibits DE 1 to DE 3294 and DR 1 to
DR 19 were admitted into evidence. Per stipulation of the parties, the court will not consider the
additional commentary contained in the rebuttal exhibits and will only focus on the numbers
contained therein.
I. INTRODUCTION
These consolidated appeals arise from related business activities involving members of
the Kahl family. Although the cases were tried together due to overlapping ownership interests
and shared evidentiary issues, this appeal concerns a narrower set of activities attributable to
Plaintiff, plus some alleged income and losses from ownership interests in his family’s business
entities. As a result, much of the evidence concerning the Kahl family business pass-through
issues appear in the related cases.
Notwithstanding the more limited scope of Plaintiff’s activities, the court encountered the
same fundamental difficulties present across the consolidated matters: Plaintiffs’ records were
incomplete, disorganized, and, in many instances, reconstructed after-the-fact. Prior to trial, the
court determined that Defendant’s spreadsheets would serve as the foundational reference
materials for the evidentiary phase of the proceedings. Accordingly, the court conditioned the
admission of Plaintiffs’ exhibits on the use of those spreadsheets as the analytical baseline for
organizing the evidence.2
2 The court conditioned admission of Plaintiffs’ exhibits pursuant to ORS 305.501(4) (statutory or technical rules of evidence are not required in the Magistrate Division) and Reed v. Dept. of Rev., 310 Or 260, 270, 798 P2d 235 (1990) (Peterson, J., concurring) (the Tax Court can require a taxpayer “to put the evidence into some minimally coherent form before” its admission).
DECISION TC-MD 230011R 2 II. STATEMENT OF FACTS
This case concerns the income and expenses reported by, or attributed to, Plaintiff for the
2015 and 2016 tax years. In addition to wage income, Plaintiff reported or was attributed
income, losses, and deductions connected to several closely held entities in which members of
the Kahl family held interests. The principal disputed adjustments are: Defendant’s bank deposit
analysis for 2015 and 2016, the 2015 and 2016 capital gain determinations, 2016 imputation of
pass-through income from Dancing Zorba, and the 2016 flow-through income from Biogen,
Celebrity Tan, and Kahl & Co.
Warren is a Manager I with the Oregon Department of Revenue and has worked as an
auditor for approximately seventeen years. She became involved in this matter as part of
Defendant’s filing enforcement efforts after Plaintiff failed to file Oregon income tax returns for
2015 and 2016. (See also Notice and Demand to File for 2015, DE 636, and for 2016, DE 729.)
Defendant later received those returns, conducted an audit, and determined a deficiency.
Plaintiff requested a conference and then appealed to this court. During the pendency of this
appeal, Warren reviewed additional documents produced in discovery, which were not available
to the auditor or conference officer. She prepared spreadsheets and summary workbooks
analyzing Plaintiff’s reported income, expenses, and income attributed from related pass-through
entities. That review led Defendant to revise and increase certain adjustments from the audit and
conference positions.
Warren testified that Plaintiff held ownership interests in multiple pass-through entities
during the tax years at issue, including Celebrity Tan, Biogen, Kahl & Co., Kahl Properties, and
Dancing Zorba. (See also DE 626-629.)
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DECISION TC-MD 230011R 3 A. 2015 Tax Year
For the 2015 tax year, the principal disputed adjustments concern Defendant’s bank
deposit analysis and its determination that Plaintiff realized unreported capital gain income. (DE
678.)
1. 2015 Bank deposit analysis
For the 2015 tax year, Warren used a bank deposit analysis to determine whether Plaintiff
had unreported income. She described that method as listing all deposits reflected on his bank
statements, classifying deposits where possible, treating unidentified deposits as unknown, and
then comparing the results to Plaintiff’s return. The materials used for the 2015 analysis
included bank statements produced during the audit, together with additional bank statements
and deposit information later obtained by subpoena during discovery. Warren’s review of
Plaintiff’s bank deposit analysis was summarized in Defendant’s 2015 Workbook. (DR 6.)
Warren testified that Plaintiff was given opportunities during discovery to explain
unidentified deposits. She further testified that, during the audit and conference stages,
Defendant did not yet have sufficient information to complete a full 2015 bank deposit analysis.
That analysis was completed only after subpoenaed bank records and additional deposit
information were obtained during discovery. As a result, no “other income” adjustment
appeared at the audit or conference stages.
On cross-examination, Warren acknowledged that Plaintiff’s 2015 return included a
Schedule E reporting rental income. She testified, however, that she could not determine
whether the unidentified deposits represented rent payments because she had not received rental
agreements or other records showing recurring rent amounts or payment patterns.
DECISION TC-MD 230011R 4 Based on the 2015 bank deposit analysis, Defendant increased Plaintiff’s “other income”
from $0 at audit and conference to $23,591. (Summary of Adj, 2015 DK, line E14.)
2. 2015 Capital gain
Warren testified that the 2015 capital gain worksheet was separate from the bank deposit
analysis and was prepared to determine whether Plaintiff had received distributions, or those that
could be imputed to him, from Kahl family businesses in excess of basis that would be taxable as
capital gain. Warren’s worksheets on this issue were drawn from Kahl Properties’ books,
including member draw accounts and note-payment entries, which Defendant treated as
distributions reflected on the books.
Warren identified nine checks totaling $130,000 and, based on the K-1 information
reported from Celebrity Tan and Biogen and on checks written to a relative, Youssef Kahl,
allocated $19,500 of that amount to Plaintiff. (Daniel Kahl Magistrate Auditor’s Workbook
2015.) She treated a check from Kahl Properties to Biogen, marked “loan,” as a distribution
because the books recorded it in a draw account. (DE 640.) She likewise treated checks for
$25,000 and $30,000 as distributions because they were entered on the books as draws. (DE
648-49.) Three checks from Kahl Properties to Celebrity Tan were also recorded under a draw
account and corresponded to entries on the books. Warren further testified that three checks to
Youssef Kahl were reflected as account-status or accounts-payable payments, but Defendant
received no documentation for an underlying note and, because the checks were made to a family
member, she treated them as distributions. (See also DR 6.)
Warren testified that Defendant used a beginning basis of zero for Plaintiff because it did
not receive basis calculations, the conference officer had determined basis to be zero, and
Defendant did not find evidence of Plaintiff’s contributions to Kahl Properties. She opined that
DECISION TC-MD 230011R 5 if basis had existed, she would have expected to see an owner’s account reflecting contributions
and distributions together with checks showing contributions. Warren noted that figures on K-1s
presented at trial did not match the books with respect to contributions and distributions and that
the books did not show contributions or distributions for Plaintiff in the relevant sections. Based
on that analysis, Defendant increased Plaintiff’s 2015 income by $19,500 as capital gain.
(Summary of Adjustments Return to Magistrate, 2015 DK, Box E15.)
Defendant’s 2015 summary workbook reflects the progression of Plaintiff’s reported
income, Defendant’s audit and conference positions, and the magistrate-stage adjustments,
including the $23,591 “other income” adjustment and the $19,500 capital gain adjustment.
DECISION TC-MD 230011R 6 2015 Daniel Return Audit Conference Magistrate Adjustment Wages $51,400.00 $51,400.00 $51,400.00 $51,400.00 $0.00 Schedule E: Celebrity Tan non passive loss -$11,547.00 $4,282.00 -$5,109.00 -$1,613.30 $9,933.70 Biogen Flow Through Adjustment $14,344.00 $48,573.00 $34,472.00 $31,098.30 $16,754.30 Biogen 179 $0.00 -$8,752.00 $0.00 -$8,752.00 $8,752.00 Dancing Zorba Pass through income $1,824.00 $32,479.00 $32,479.00 $29,204.10 $27,380.10 Kahl & Co flow through -$3,000.00 $29,399.00 -$1,888.00 -$1,920.90 $1,079.10 Kahl & Co passive rental income $1,800.00 $1,800.00 $1,800.00 Kahl & Properties -$2,925.00 -$2,881.35 -$2,881.35 Personal Rental -$3,379.00 -$3,379.00 -$3,379.00 -$3,379.00 $0.00 Schedule E total -$1,758.00 $102,602.00 $55,450.00 $43,555.85 $45,313.85 Other Income $23,591.00 $24,983.00 Captial Gain $19,500.00 $19,500.00
Total Income $49,642.00 $154,002.00 $106,851.00 $138,047.00 $88,405.00 SE Tax $0.00 -$5,246.00 -$2,295.00 -$3,643.00 $3,643.00 AGI $49,642.00 $148,756.00 $104,556.00 $134,404.00 $84,762.00
Oregon Return AGI $49,642.00 $148,756.00 $104,556.00 $134,404.00 $84,762.00 Federal Tax Liability -$5,625.00 -$5,625.00 -$5,625.00 -$5,625.00 $0.00 Standard Deduction -$2,145.00 -$2,145.00 -$2,145.00 -$2,145.00 $0.00 Taxable Income $41,872.00 $140,986.00 $96,786.00 $126,634.00 $84,762.00
Tax before credits $3,532.00 $12,598.00 $8,476.00 $11,177.00 $7,645.00 Exemption Credit -$194.00 $0.00 $0.00 $0.00 $194.00 Withholding -$2,819.00 -$2,819.00 -$2,819.00 -$2,819.00 $0.00 Kicker -$219.00 -$219.00 -$219.00 -$219.00 $0.00 Tax after credits/withholding $300.00 $9,560.00 $5,438.00 $8,139.00 $7,839.00
Penalty $1,852.00 $1,028.00 $1,568.00
The summary workbook reflects Warren’s recalculation of Plaintiff’s 2015 tax liability
based on Defendant’s revised conclusions. Except as otherwise noted in this decision, the court
accepts the revised 2015 amounts shown in Defendant’s summary workbook above. Defendant
also computed a penalty at 20 percent of the underpayment.
DECISION TC-MD 230011R 7 B. 2016 Tax Year
For the 2016 tax year, the principal disputed adjustments concern Defendant’s bank
deposit analysis, its imputation of pass-through income from Dancing Zorba, and related flow-
through income adjustments involving Biogen, Celebrity Tan, and Kahl & Co. (DE 757.)
1. 2016 Bank deposit analysis
Warren testified that Defendant’s 2016 summary workbook reflected an increase in
“other income” between the audit or conference stage and Defendant’s later magistrate-stage
position after discovery. (DR 7.) That analysis identified $33,421.30 in deposits as unexplained
before certain items were filtered. After reviewing subpoenaed information, Defendant
ultimately treated four deposits as wages rather than unexplained income. (Id.)
Warren further testified that deposits related to property activity raised questions for
Defendant because the property appeared to be a rental, ownership had shifted among Kahl
family members, and Defendant did not receive satisfactory answers about the nature of the
payments. For those reasons, Defendant treated the deposits as income after determining they
appeared to involve a business transaction relating to a known rental property. One line item in
the 2016 summary workbook therefore reflected “other income” derived from the bank deposit
analysis.
On cross-examination, Warren acknowledged that two deposits previously treated as
unexplained income—$1,661.48, made on January 19, 2016, and $1,661.48 made on July 20,
2016—were actually wages and should not have been included as additional income. Based on
that concession, Plaintiff’s 2016 bank deposit adjustment was overstated by $3,322.96.
DECISION TC-MD 230011R 8 2. 2016 Dancing Zorba indexed pass-through income
Plaintiff was a part owner of Dancing Zorba, a festival-based food service operation, and
reported income and deductions from that entity in 2016. Dancing Zorba did not file a 2016
income tax return, despite Defendant’s demand that it do so. The entity’s 2015 income was
determined by the court in Edward Kahl v. Department of Revenue, TC-MD 230010R, and that
figure served as the baseline for Defendant’s 2016 reconstruction.
Because Dancing Zorba did not file a 2016 return and Defendant lacked sufficient
information to determine what should have been filed, Defendant used an indexing method for
filing enforcement. Under that method, Defendant began with Dancing Zorba’s 2015 income, as
determined in the Edward Kahl case at $108,263, applied CPI indexing, and arrived at an
indexed 2016 income of $110,357. (Daniel Kahl Magistrate Auditor’s Workbook 2016.)
Defendant then applied Plaintiff’s last available K-1 ownership percentage of 30 percent and
calculated $33,107 of income attributable to Plaintiff from Dancing Zorba for 2016. As of the
date of trial, Dancing Zorba’s 2016 return had still not been filed.
3. 2016 Celebrity Tan, Biogen, and Kahl & Co. flow-through items
The 2016 flow-through adjustments for Biogen, Celebrity Tan, and Kahl & Co.
attributable to Plaintiff’s ownership interests in those entities are addressed in the court’s
decision in Nidal Kahl and Panayiota Kahl v. Department of Revenue, TC-MD 230009R. The
entity-level computations underlying those adjustments are set out in that decision and are
incorporated here by reference to the extent they bear on Plaintiff’s ownership share. For
purposes of this case, Defendant applied flow-through income of $66,507.98 from Biogen,
$21,300 from Celebrity Tan, a $59 loss from Kahl & Co., and $798 of passive rental income
from Kahl & Co.
DECISION TC-MD 230011R 9 4. Summary Workbook for 2016
Defendant’s 2016 summary workbook reflects the progression of Plaintiff’s reported
income, the audit position, the conference position, and Defendant’s revised position after
discovery.
2016 Daniel Return Audit Conference Magistrate Adjustment Wages $57,200.00 $57,200.00 $57,200.00 $57,200.00 Capital Gain $5,635.00 $0.00 $0.00 Schedule E: Celebrity Tan non passive loss -$11,500.00 $91,030.00 $22,908.00 $21,300.00 $37,728.00 Biogen Flow Through Adjustment $14,050.00 $61,346.00 $61,247.00 $66,507.98 $52,457.98 Dancing Zorba Pass through income $2,000.00 $33,107.00 $33,107.00 $33,107.00 $31,107.00 Kahl & Co Flow through $3,634.00 -$89.00 -$59.00 Kahl & Co passive rental income -$3,000.00 $798.00 $798.00 $798.00 $3,709.00 Personal Rental -$4,198.00 -$4,198.00 -$4,198.00 -$4,198.00 $0.00 Schedule E total -$2,648.00 $185,717.00 $113,773.00 $117,455.98 $120,103.98 Other Income $43,103.00 $36,452.00 $41,261.00 $41,261.00 Student Loan Interest -$838.00 $0.00 $0.00 $0.00 $838.00
Total Income $53,714.00 $291,655.00 $207,425.00 $215,917.00 $162,203.00
AGI $53,714.00 $291,655.00 $207,425.00 $215,917.00 $162,203.00
Oregon Return AGI $53,714.00 $291,655.00 $207,425.00 $215,917.00 $162,203.00 Federal Tax Liability -$6,500.00 $0.00 $0.00 $0.00 $6,500.00 Taxable refunds Standard Deduction -$2,155.00 -$2,155.00 -$2,155.00 -$2,155.00 $0.00 Taxable Income $45,059.00 $289,500.00 $205,270.00 $213,762.00 $168,703.00
Tax before credits $3,819.00 $27,300.00 $18,961.00 $19,801.00 $15,982.00 Exemption Credit -$195.00 $0.00 $0.00 $0.00 $195.00 Withholding -$3,120.00 -$3,120.00 -$3,120.00 -$3,120.00 $0.00 Refund Tax after credits/withholding $504.00 $24,180.00 $15,841.00 $16,681.00 $16,177.00
Penalty $4,735.00 $3,067.00 $3,235.00
The court accepts Defendant’s 2016 workbook, with the exception of $3,322.96 of
deposits included in the bank deposit analysis as income but later conceded as wages that had
already been accounted for.
DECISION TC-MD 230011R 10 III. ANALYSIS
Oregon taxable income is defined by reference to the Internal Revenue Code (IRC),
subject to certain modifications not relevant here. ORS 316.007; ORS 316.022(6).3 For
adjustments included in the original assessment, Plaintiff bears the burden to show error by a
preponderance of the evidence. ORS 305.427. For increases first sought in Defendant’s
Amended Answer, Defendant bears the burden to prove the additional amounts. See Donohoe v.
Dept. of Rev., TC-MD 150521N, 2016 WL 4446635 at *3 (Or Tax M Div, Aug 23, 2016).
Taxpayers must maintain records sufficient to establish the amounts of their income and
deductions reported on their returns. See IRC § 6001; Treas Reg § 1.6001-1(a). When a
taxpayer’s records are inadequate or do not clearly reflect income, Defendant may prove
unreported income by any practicable method of reconstruction reasonably calculated to reflect
income. Danielson v. Dept. of Rev., TC-MD 160282C, 2017 WL 5158730 at *3 (Or Tax M Div,
Nov 7, 2017) (quoting Brenner v. Dept. of Rev., 9 OTR 299, 306 (1983). Once Defendant has
made a reasonable reconstruction, the taxpayer bears the burden to show error in that
reconstruction, including by identifying omitted offset, duplication, or deposits from nontaxable
sources. Petzoldt v. Comm’r, 92 TC 661, 687 (1989).
Plaintiff did not appear for trial and no witnesses testified on his behalf. The documents
admitted on his behalf did not provide sufficient information to meet his burden of proof on the
adjustments included in the original assessment. The remaining analysis therefore addresses
whether Defendant has met its burden of proof on the adjustments first sought in its Amended
Answer, and whether Defendant’s reconstruction was reasonable across both tax years.
3 The court’s references to the Oregon Revised Statutes (ORS) are to 2013. The relevant statutes were not revised between 2013 and 2015.
DECISION TC-MD 230011R 11 A. 2015 Tax Year
1. Bank deposit analysis
As discussed above, when a taxpayer’s records do not clearly reflect income, Defendant
may use a reasonable method of reconstruction. In the bank-deposit analysis, deposits are treated
as prima facie evidence of taxable receipts unless shown to be derived from a nontaxable source.
See Ekwenugo v. Comm’r, 102 TCM (CCH) 321, 2011 WL 4484788 at *3 (2011) (citations
omitted). Defendant’s reconstruction is not required to be exact; it need only be reasonable in
light of the surrounding facts and circumstances. Petzoldt, 92 TC at 687. Once Defendant has
made that showing, the taxpayer must show error in the reconstruction, including by identifying
duplication, omitted offsets, or deposits from nontaxable sources. Id.
The court finds that Defendant’s bank deposit analysis was reasonable. Defendant tied
the deposits it treated as income to Plaintiff’s bank records and revised its analysis as additional
records became available during discovery. The fact that the “other income” adjustment did not
appear until the magistrate stage is explained by Defendant’s lack of access to complete bank
records until subpoenas were served during this proceeding.
Plaintiff’s cross-examination raised the suggestion that some unexplained deposits may
have represented rent payments already reported on his Schedule E. The court has considered
that suggestion. However, Plaintiff offered no rental agreements, payment records, or tracing
evidence connecting any specific deposit to reported rental income. The burden to identify
deposits from nontaxable or previously reported sources rested with Plaintiff, and he did not
meet it. Conversely, Defendant carried its burden as to the 2015 bank deposit analysis
adjustment of $23,591, and that adjustment is sustained.
DECISION TC-MD 230011R 12 2. 2015 Capital gain/basis
Defendant’s 2015 capital gain adjustment of $19,500 arose from the determination that
distributions received from Kahl Properties exceeded Plaintiff’s basis in that entity. Defendant
used a beginning basis of zero because it received no verifiable support for Plaintiff’s basis
calculations, the conference officer had previously determined basis to be zero, and Defendant
found no evidence of Plaintiff’s contributions to Kahl Properties in the available records.
Warren testified that the books did not show contributions or distributions attributable to Plaintiff
in the relevant sections and that K-1 figures presented were inconsistent with the books and
therefore not reliable evidence of basis.
Plaintiff offered no basis calculations, contribution records, or other evidence to rebut the
zero-basis assumption. The court finds Defendant’s use of a zero beginning basis was
reasonable under the circumstances. The $19,500 capital gain adjustment is sustained.
B. 2016 Tax Year
As with 2015, Plaintiff’s cross-examination raised the suggestion that some of the
unexplained deposits may have represented cash receipts from rental properties. Plaintiff offered
no testimony, records, or tracing evidence connecting any specific deposit to reported rental
income or otherwise showing that the deposits were improperly treated as unreported income.
Warren conceded at trial that two deposits in the amount of $1,661.48 each, made on
January 19, 2016, and July 20, 2016, were wages and should not have been included as
unexplained income. The court therefore sustains the 2016 bank-deposit adjustment as reduced
by $3,322.96.
DECISION TC-MD 230011R 13 2. 2016 Dancing Zorba pass-through income
Plaintiff was a part owner of Dancing Zorba and reported income and deductions from
that entity for 2016. Dancing Zorba did not file a 2016 return despite Defendant’s demand.
Under those circumstances, Defendant could not rely on an entity return to determine the amount
of income properly attributable to Plaintiff.
Because Dancing Zorba operated largely in cash and did not file a 2016 return, Defendant
lacked sufficient entry-level information to support a direct reconstruction of income. A bank
deposit analysis was not practicable given the cash-based nature of the business and the absence
of entry-level bank records from which gross receipts could be reliably determined. Defendant
instead used an indirect method. It began with Dancing Zorba’s 2015 income, as determined in
Edward Kahl v. Department of Revenue, TC-MD 230010R. Defendant then applied CPI
indexing to estimate 2016 income of $110,357 and attributed 30 percent of that amount to
Plaintiff based on his last available K-1 ownership percentage. That calculation yielded $33,107
of income attributable to Plaintiff.
Where available records do not clearly reflect income, Defendant may use any
practicable method reasonably calculated to determine income under the circumstances.
Brenner, 9 OTR at 306. Defendant here faced a non-filing pass-through entity, a cash-based
business, and limited available information. Its use of an indirect projection method, grounded
in a verified prior year income figure and an established ownership percentage, was a reasonably
practicable approach under those constraints.
Although CPI indexing is necessarily approximate, the court finds it reasonable here
because Plaintiff offered no alternative income figure, no entity-level records, and no evidence
showing that Dancing Zorba’s income materially differed from the indexed estimate. The court
DECISION TC-MD 230011R 14 finds that Defendant’s methodology was reasonable and sustains the Dancing Zorba income
adjustment of $33,107.
3. 2016 Biogen, Celebrity Tan, and Kahl & Co. flow-through income
The entity level computations underlying the 2016 flow-through adjustments for Biogen,
Celebrity Tan, and Kahl & Co. are addressed in the court’s decision in Nidal Kahl and Panayiota
Kahl v. Department of Revenue, TC-MD 230009R, and are incorporated here by reference. The
court found those adjustments to be properly supported in that decision. As applied to Plaintiff,
Defendant used his specific ownership percentages to calculate his share of the resulting income
and losses: flow-through income of $66,507.98 from Biogen, $21,300 from Celebrity Tan, a $59
loss from Kahl & Co., and $798 of passive rental income from Kahl & Co. Plaintiff offered no
evidence to rebut those figures or to challenge the ownership percentages applied. The court
finds that Defendant met its burden as to the 2016 flow-through adjustments, and those
adjustments are sustained as reflected in Defendant’s summary workbook.
IV. CONCLUSION
After careful consideration, the court concludes that Plaintiff has not met his burden of
proof. The court further concludes that Defendant has met its burden with respect to the
increased deficiency asserted in its cross-claim. Now, therefore,
IT IS THE DECISION OF THIS COURT that Plaintiff’s appeal is denied.
DECISION TC-MD 230011R 15 IT IS FURTHER THE DECISION OF THIS COURT that Defendant’s cross-claim to
increase the deficiency is granted as stated in its two workbooks included above, with the
exception that $3,322.96 should be removed from unexplained income for the 2016 tax year.
RICHARD D. DAVIS MAGISTRATE
To appeal this Decision, file a complaint in the Regular Division of the Oregon Tax Court. Appeals are accepted by electronic filing; by mail at 1163 State Street, Salem, OR 97301-2563; and by hand delivery to 1241 State Street, Salem, OR, Floor 4R.
Your complaint must be submitted within 60 days after the date of this Decision or this Decision cannot be changed. TCR-MD 19 B.
This document was signed by Magistrate Richard D. Davis and entered on July 2, 2026.
DECISION TC-MD 230011R 16