Gua v. Dept. of Rev. ( 2023 )

222 May 25, 2023 No. 17
IN THE OREGON TAX COURT
REGULAR DIVISION
Cindy GUA,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
State of Oregon,
Defendant.
(TC 5453)
In this personal income tax case, Plaintiff submitted a motion to stay their
obligation to pay the tax assessed, based on undue hardship. Defendant argued
the motion to stay payment should be denied because Plaintiff’s affidavit was
internally inconsistent. Alternatively, Defendant argued that more information
was needed before the court could rule. The court ordered additional substanti-
ation of hardship.
Submitted on Plaintiff’s motion for stay of payment of
income tax.
Cindy Gua, Plaintiff, filed the motion pro se.
Brian Collins, Assistant Attorney General, Department
of Justice, Salem, filed a response for Defendant.
Decision rendered May 25, 2023.
ROBERT T. MANICKE, Judge.
On or about April 19, 2023, Plaintiff filed a complaint
contesting personal income tax deficiency assessments for
tax years 2016, 2017, 2018 and 2019. ORS 305.419(1) gen-
erally requires payment of any net income tax assessed, as
well as penalties and interest, on or before the filing of a
complaint in this division. However, when a taxpayer files a
motion and affidavit alleging “undue hardship,” this court
may stay all or any part of that payment if the court finds
that immediate payment would result in an undue hard-
ship. ORS 305.419(3). Tax Court Rule (TCR) 18 C provides
procedures for adjudicating allegations of undue hardship.
This matter is before the court on Plaintiff’s Motion
for Stay of Payment of Income tax, filed on or about the same
Cite as 25 OTR 222 (2023) 223
date as the complaint. The motion asks the court to find
that payment at this time would present an undue hardship
under ORS 305.419(3). Plaintiff included with her motion a
signed and notarized affidavit on the form provided by the
court. The affidavit discloses monthly income somewhat in
excess of living expenses, no real property, no vehicles other
than a motorcycle, cash and bank accounts totaling approx-
imately two months’ income, and other personal property
valued at about three months’ income in total.
On or about May 22, 2023, Defendant filed a
response to Plaintiff’s motion, supported by a declaration by
one of Defendant’s auditors. Defendant argues that, on its
face, Plaintiff’s affidavit is internally inconsistent because
it discloses monthly income from a “[s]hare of profits as a
member of an LLC” but fails to list any limited liability com-
pany interests or ownership in any business in the section
provided for “All Property or Other Assets.”
Defendant also argues that the affidavit is unre-
liable unless Plaintiff substantiates it with additional evi-
dence. Defendant’s declaration alleges that Plaintiff has
filed no tax returns for the years at issue, even though she is
an owner and managing member of four active marijuana-
related businesses in Oregon, at least one of which filed
marijuana sales tax returns from which Defendant esti-
mates that Plaintiff as owner derived substantial income.
Defendant also filed with this division copies of two orders in
the Magistrate Division case from which Plaintiff appeals.
The magistrate’s Order Denying Plaintiff’s Motion for
Summary Judgment recites that the total of the amounts
shown in Defendant’s notices of assessment for the four
years at issue is $869,979.87. That order directs Plaintiff, by
a date certain, to send any documents to Defendant to cor-
rect the assessment amounts. The magistrate’s subsequent
Order of Dismissal dismisses Plaintiff’s appeal for failure
to submit trial exhibits by the exchange deadline, failure to
appear at trial, and failure to communicate with the court.
TCR 18 C(3)(b) provides, in relevant part:
“The defendant may file objections to the motion for stay of
payment within 30 days following service of the motion. If
the defendant objects to the motion and the court cannot
224 Gua v. Dept. of Rev.
determine from the plaintiff’s affidavit whether payment of
the tax, penalty, and interest would be an undue hardship,
the court may require the plaintiff to submit further proof
of hardship in writing or the court may schedule a hearing
for that purpose.”
In light of Defendant’s response, the court finds
that it cannot determine from Plaintiff’s affidavit whether
payment of the tax, penalty, and interest would be an undue
hardship. The court orders Plaintiff to substantiate her affi-
davit by submitting the following further proof of hardship:
(1) All tax returns of Plaintiff filed with the Internal
Revenue Service for tax periods in 2018 through April 30,
2023;
(2) All Internal Revenue Service Forms W-2, 1099 (of
any kind), or K-1 directed to Plaintiff for tax periods in
2018 through April 30, 2023;
(3) A declaration identifying all income or gifts, not
reported under items 1 or 2 above, that Plaintiff real-
ized or received from January 1, 2018, through April 30,
2023;
(4) Monthly statements for any bank, brokerage firm,
or other financial institution with which Plaintiff held
an account, including balances and monthly transac-
tions, for January 1, 2020, through April 30, 2023;
(5) Monthly credit card statements for all credit cards,
including balances and itemized transactions, for
January 1, 2020, through April 30, 2023; and
(6) Any property tax statement issued in 2018 through
April 30, 2023, for property held by Plaintiff.
All documents must be attached to a new form enti-
tled Affidavit of Income, Assets, and Expenses, and Plaintiff
must sign page three of that form before a notary public.
Plaintiff must file the new Affidavit and attachments with
the court, and deliver a copy to Defendant’s counsel, on or
before June 30, 2023. Now, therefore,
IT IS SO ORDERED.