Baisch v. Oregon Department of Revenue

CARL N. BYERS, Judge.

Plaintiffs are limited partners in Bakersfield Associates (Bakersfield), an Oregon limited partnership. Defendant adjusted each of the plaintiffs tax returns for the years 1982 through 1984. Initially, defendant adjusted the returns by reallocating partnership income and expenses. At the administrative hearing, defendant changed its position and viewed Bakersfield’s purchase-leaseback transaction as a “sham” that should be disregarded for tax purposes. In its opinions and orders, defendant found the transaction a sham and plaintiffs appealed to this court.

The scenario in…