OR-GOV: Kitz agrees to release tax records; Dudley, not so much

Carla Axtman

While questions about Chris Dudley's tax dodging/possible evasion continue to swirl, John Kitzhaber opens up and agrees to make his tax returns public.

Nigel Jaquiss, Willamette Week:

In the wake of questions about Republican gubernatorial nominee Chris Dudley’s residency during his first stint playing for the Portland Trail Blazers, WW asked Dudley and Democratic gubernatorial candidate John Kitzhaber for their tax returns from 1994 through 1998. The issue is whether Dudley lived in Washington, which has no income tax, from 1994 to 1998 as he claims, or whether he lived at least part of the time in Oregon, which has among the nation’s highest income tax rates.

Yesterday, Kitzhaber agreed to turn over his returns.

Jaquiss goes on to report that Dudley's campaign hasn't yet given a definitive answer as to whether they'll turn over his returns. Spokesman LeRoy Coleman says they're considering it.

Even if Dudley chooses to release his tax records--a number of other questions still remain: Did Dudley actually establish residency in Washington? Was he living in his Oregon residence at any time during the span he claimed to be a Washington resident? And finally, why should Oregonians vote for a guy who admits to dodging, but may have actually been evading...Oregon taxes?

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    Keep the pressure on, Carla. If he's got nothing to hide on his tax returns let him open them up for public scrutiny. Washington or Oregon.. in the immortal words of Firesign Radio Theatre, "How can you be two places at once, when you're not anywhere at all???

    Okay,, how many people here remember that one?

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    Scandalous, and really disrespectful to his fellow citizens; they paid for the roads he drove on after all.

    Duds should move back to Washington after this drubbing, come November. Vote Blue!

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    The Dudster is now hitting back with his own attack Ad. Notably it doesn't rebut or answer the tax question, but simply attacks Kitz for being "negative." Oh, the inhumanity!

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    Carla, why don't you post copies of your most recent income tax returns on-line to show how harmless that is?

    And before you ask, since I believe that tax records are confidential for a reason, I will not make mine public. Nor was I ever asked to in any of my elections over twenty years in politics.

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      It is not unusual for candidates of high political office to reveal their tax returns. What does the Dudster have to hide?

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        Other than President of the United States, Bill, can you name one? Has any Oregon candidate for governor ever released his or her tax returns?

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          Yes, there is an Oregon candidate for governor who has released his tax returns. Read Carla's post -- it's John Kitzhaber.

          And it's different for Dudley because he has admitted that he moved out of state in order to pay less in taxes in Oregon, the state he now hopes to govern.

          It's even more of an issue because it now appears that his claim of Washington residency is now in doubt, since he didn't switch his voter registration.

          Of course, he wasn't bothering to vote in those days, so I guess it didn't mean much to him.

          It's odd that the G.O.P. has chosen such a johnny-come-lately to be their candidate for the top political job in the state.

          Jack, would you hire someone to be CEO of your company that has shown no interest in business until a year ago, and has little-to-no relevant experience?

          And I thought Republicans were the ones who want to run government like a business.

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            I can seem to find Kitzhaber's tax returns posted anywhere, Michael, will you send me a copy?

            And while you are at it, did John and Sharon Kitzhaber file joint tax returns during those years and are the entire tax returns available?

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              It's true, Jack, apparently WW either hasn't received them yet, or they have not yet posted information about them. We'll see. But it would look bad for Kitz to say he'd release them and not do it, and if he doesn't I'll jump on the bandwagon for criticizing him for that.

              The real issue here, though, is did Chris Dudley falsely claim Washington as his residence for tax purposes. The answer is unclear at this point.

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                I predict that the "public" is never going to see any of these tax returns. Nor, in my opinion, should they. I'm guessing select members of the media will review and thell us what they want us to know about them.

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          Apparently in Rhode Island they do.


          And we have a Dem. gubernatorial candidate who doesn't have anything to hide.

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    Given that the BO crew knows all about Kitz, this seems to be the proper forum to get an answer to my question:

    Is it true that Kitz lives in a condo in the Pearl that has a property tax abatement?

    I have heard this mentioned on other blogs and am curious if it is correct. Thx.

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    "If John Kitzhaber wants to talk about where I put my head on a pillow 16 years ago while 200,000 Oregonians are out of work, that’s his prerogative. I simply will not engage in this nonsense." -- Chris Dudley

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      In other words he's stonewalling. He lied about his taxes and his actual residence.

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        Pretty strong words from someone WITH NO ACTUAL PROOF

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          Let the Dudster provide the proof. But here it looks like he doesn't meet the standard for abandoning his Oregon residency. If he wasn't playing a shell game on advice of his accountant then let him answer the questions that are raised, and let him be transparent in his tax and residency status.


          "According to Oregon law, you can claim another state as your home but still keep a residence in Oregon without paying state taxes on all of your income. However, simply setting up a residence in another state is not enough. Oregon wants to know where you consider your "domicile." While you may have more than one residence, under tax law you can have only one domicile at a time.

          Under state tax rules, you must do three things to give up your domicile status in Oregon. First, you must get a new residence outside of Oregon. Second, you must live in that residence. And finally, you must abandon your old Oregon domicile. "

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            And Dudley did all three of those things.

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              Jack, it's not clear that Dudley abandoned his domicile. He didn't change his voter registration. Of course, back then he wasn't bothering to vote.

              He got a Washington driver's license, but kept his Oregon license, which is a little odd.

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                As has been stated ad naseum by the Department of Revenue and tax experts, there are no clear rules on domicile. Domicile is a function of two things: residency and intent.

                A person is entitled to claim any residency as their domicile, subject to being challenged by the Department of Revenue. If challenged, the determination of domicile will be determined by the "totality of facts and circumstances" indicating the taxpayer's intent. No one factor is determinative in this and there is no mathematical formula that will determine it.

                The ODR had 7 years in which to challenge Dudley's claim of Washington as his residence (the four years he lived in Washington plus the three-year statute of limitations beyond that). They didn't. Case closed. For tax purposes, he was a Washington resident.

                There is nothing in his tax returns that will in any way change that conclusion. The whole request for tax returns is a red herring. It is a fishing expedition, nothing more, nothing less.

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                  "There is nothing in his tax returns that will in any way change that conclusion. The whole request for tax returns is a red herring."


                  If Duds owned a residence in Oregon while claiming Washington residency, whether he deducted the residence on Sched. E as a rental or on Sched. A as a second home would be relevant.

                  So would knowing if he had other deductions showing activity in Wash or Or (church contributions, other income, misc. deductions, etc.).

                  When a candidate makes his financial expertise an issue, as well as his "deep affection and commitment to Oregon", questions about tax dodging/evasion need to be answered. If Duds won't provide evidence, that's an answer in and of itself.

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                    Dudley never claimed he rented out the Portland home nor did he have to. He could keep that home and continue to use it as a second (actually, I believe it would be at least his third home, since The Columbia reported in a 1996 story that he still owned a home in San Diego, where he grew up).

                    Chris Dudley made no secret of buying his place at Camas and claiming it as his domicile. The time for that to be challenged has long passed (since about 2001, I believe). The only thing he would gain by making his tax returns "public" would be to allow the media to go on a fishing expedition.

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                      You seem unclear on how the issue of determining a person's "tax home" is.

                      If he really maintained his tax home in Or and not Wash, then he also mis-represented his federal tax liability as well as his state liability. And there is no statute of limitations on tax fraud, if he went that far.

                      How much of this was declared on his returns is exactly what's at issue.

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                        How did he misrepresent his federal tax liability? The last time I looked, Washington is also part of the United States.

                        And no one has suggested anything that remotely rises to the level of tax fraud. You guys are really grasping at straws. Do you think Kitzhaber is that far behind that you need to do this?

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      Sounds like his answer will be no to releasing his tax records.

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      It's not about where he put his head on a pillow, it's where he actually resided, which isn't just about where you put your head.

      It's also about where you're registered to vote. He was registered to vote in Oregon, not Washington. It's also about where his cars were registered. I've seen conflicting reports about this, but apparently they were registered in both states.

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      Shorter Dudley: I was caught bailing on Oregon. Sucks for me.

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    This story is obviously a big worry for the Dudley campaign. He comes into this race largely undefined, and now early in the general election campaign he's so far been defined by two issues -- his unwillingness to debate (and his dishonesty in avoiding one debate), and this one.

    If Dudley had previously been active in politics, it wouldn't damage him so much, but voters only know him as a basketball player, they don't know him as a politician, so these things hurt him tremendously.

    He's now seen as Dudley the Dodger, dodger of debates and taxes. Not a good position for an inexperienced candidate vying for the state's top elected post.

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    Residency is not just intent. It's actions. And, based on what I'm reading in these various posts, his actions contradict what he says his intent was. I think it is relevant because it speaks volumes about his character. Ethics is about doing the right thing - even if no one is watching. And I don't buy that he can pass this off to ignorance of the law or bad advice. The taxpayer is responsible for the content of the return, regardless of who prepared it or what advice they got. BTW - the DOR has 3 years from when a return is filed to examine it.

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      I appreciate the fact that you think you're an expert because you work for the Department of Revenue, but intent actually is the legal standard; the actions are simply evidence of that intent and there is no simple formula for what actions are determinative.

      Even if the Department of Revenue had made an adverse determination on Dudley's choice of domicile, the Oregon Tax Court and the State Supreme Court could have overturned their decision. Since it is a matter of inter-state taxation, you could even have gone to federal court.

      All of which is moot, of course, because the Oregon Department of Revenue never challenged his determination. I believe he spent four years as a Trailblazer filing as a nonresident, from 1994 to 1995. Assuming he filed his returns on time, the ODR could have challenged this anytime from April 15, 1995 through April 15, 2001. They did not. Case closed.

      If the ODR was not zealous in checking on Chris and other taxpayers in a similar situation, maybe we sould blame the person who was governor at that time for not making the ODR's tax collection practices a higher priority. By the way, who was governor back than?

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    Jack, thanks your comments. It's so nice to know our work is respected and appreciated. Can you enlighten me on any court cases that support what you're saying? And, I am astonished you believe you can predict how the tax court or supreme court might rule in this case. Especially, without all the facts.
    Intent may be a legal standard, but the actions (or inactions) of individuals are very relevant. Bottom line, this is a purely academic discussion. Without his tax returns and/or COMPLETE financial records, NO ONE knows ALL the facts - except Dudley and his accountant.

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    Correction - my work...I only speak for myself here.

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    But, Lea, that's just my point; no one knows how the Tax Court of Oregon Supreme Court would have ruled on this case if the Oregon Department of Revenue had challenged Dudley's nonresident status because it was never challenged. The time to do so is well past.

    The reason we have a statute of limitations on taxing authorities is so that taxpayers who file their tax returns in a timely fashion based on the law and facts as they understand them at the time are not subject to being second-guessed about it 10 or 15 or 20 years later.

    By the way, do most of you still have your tax returns from 15 years ago? I don't.

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    Jack, your comment makes it sound like an absolute. If the DOR had challenged his residency status and if it went to the tax court or supreme court, they would have overturned it. Without all his records - which I don't believe any of us have - this is a purely hypothetical dicussion. Are you privy to some inside info or public documents the rest of us are not? You posted a comment earlier that the DOR had 7 years to challenge his claim. I am only aware of the 3 year statute (3 years after the return is filed or the due date, whichever is later). There are a few other statutory exceptions but the example you gave is out of left field. How do you figure?

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      The ODR had 7 years to challenge his claim--each of the four years he filed returns as a Washington residence plus three years beyond the date his last return was filed.

      And somehow, we aren't communicating. I am not saying I know how the Tax Court of Supreme Court would have ruled, but neither do you. The fact is, all of that is moot because the ODR never challenged his claim to be a Washington resident.

      All of the conditions you have cited are simply elements in a "facts and circumstances" determination, not a precise formula. That's why all the media reports and speculation on this site and elsewhere are just empty rhetoric.

      Chris clearly had a sufficient basis to claim Washington residency and it was up to the ODR to challenge it--which they did not.

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    I might not be an "expert" in your eyes - I don't believe one exists - but I do have enough real life experience and working knowledge to know that, without all the pertinent records, no one posting on this site - including you - has all the answers. Only Dudley and his accountant do. Every tax situation is different and every tax year stands on it's own. The facts and circumstances shared here, however, do point to his maintaining residency in Oregon. IMO, most times, it's not the allegation but how it is responded to. So far, Dudley is fumbling it and digging a deeper hole. If this is such a non-story, why do you feel compeled to keep commenting? BTW - You have stated several times that his residency status wasn't challenged. How do you know?

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