On June 3, 2005, the Supreme Court of Oregon affirmed the decision. Curtis v. Dep't of Revenue, 112 P.3d 330 (Or. 2005). On appeal, the U.S. Court of Appeals for the Ninth Circuit remanded the case for clarification as to the evidence this Court relied upon in its findings regarding the amounts of petitioner's unreported income.
For example, under alternative (a), the court in this case would reject Taxpayer's Sixteenth Amendment argument without further analysis, because the Sixteenth Amendment relates only to Congress's obligation to apportion certain tax burdens among the states based on federal census data, a scheme that neither applies to any state nor has any counterpart under Oregon law. See Curtis v. Dept. of Rev., 17 OTR 414, 425 (2004), aff'd 338 Or. 579, 112 P3 d 330 (2005). On the other hand, under alternative (b), this court would be required to determine whether the incorporated provision of federal law was valid, applying federal principles of statutory and constitutional interpretation.
While “Oregon ultimately relies on federal definitions * * * to determine an individual's Oregon liability * * * [a]n Oregon liability can be established independently from any federal enforcement action.” Curtis v. Dept. of Rev., 17 OTR 414, 418 (2004), (citing Detrick v. Dept. of Rev., 311 Or. 152, 156, 806 P.2d 682 (1991)), aff'd, 338 Or. 579, 112 P.3d 330 (2005) Plaintiffs have not presented convincing evidence that the building should not be classified as real property.
Id. Taxpayers are mistaken in their belief that federal income tax liability must be established before Oregon income tax liability. Curtis v. Dept. of Rev., 17 OTR 414, 418 (2004), aff'd, 338 Or 579, 112 P3d 330 (2005) (citing Detrick v. Dept. of Rev., 311 Or 152, 156, 806 P2d 682 (1991)). Oregon income tax liability may be calculated independently from federal income tax liability.
Taxpayer also complains that the magistrate who heard his case was biased against taxpayer and ignored important law, thus violating his oath and exceeding his authority. However, the court finds dispositive a statement from Curtis v. Dept. of Rev., 17 OTR 414, 420 (2004), aff'd, 338 Or 579, 112 P3d 330 (2005): "As to the department's procedures, the defects of the type asserted by taxpayer are irrelevant because this court proceeding affords her a de novo proceeding, in which the outcome of her tax liability can be judicially determined, and any shortcomings that occurred during administrative adjudication corrected." Although that statement referred to allegations of improper conduct in administrative proceedings, which were appealed to this court, the court finds the reasoning equally applicable to allegations of improper conduct in Magistrate Division proceedings, which are appealed to the Regular Division, at least where the Magistrate Division proceedings ended in a decision on the merits.
See Pollock, 158 US at 620 ("The States, respectively, possessed plenary powers of taxation. They could tax the property of their citizens in such manner and to such extent as they saw fit."); id. at 621 ("The founders anticipated that the expenditures of the States, their counties, cities, and towns, would chiefly be met by direct taxation on accumulated property."); M'Culloch v. State, 17 US 316, 428, 4 L Ed 579 (1819) ("[T]he power of taxing the people and their property is essential to the very existence of government, and may be legitimately exercised * * * to the utmost extent to which the government may choose to carry it."); id. ("The people of a State, therefore, give to their government a right of taxing themselves and their property."); see also Curtis v. Dept. of Rev., 17 OTR 414 (2004), aff'd, 338 Or 579, 112 P3d 330 (2005) (holding that "under the federal constitution the states retained unlimited authority in matters of taxation" except where trumped by, for instance, the Commerce Clause). "Indeed, Oregon has imposed such a tax from the time of its existence as a state." Utterback v. Dept. of Rev., 17 OTR 276, 278 (2003).