During the 2010 race for Oregon governor, WW reported that GOP candidate Chris Dudley had taken a $350,000 tax deduction for allowing the Lake Oswego Fire Department to burn down his house as a training exercise. (Dudley wanted to build a new house on the property). That practice, which homeowners have engaged in elsewhere, is controversial. Critics say if the homeowner planned to raze his house in any case, the tax deduction is bogus.

A panel of three federal judges in Chicago ruled last week that a Wisconsin homeowner who also tried to claim a benefit of allowing firefighters to torch his house not entitled to a deduction. 

"By deciding to destroy the house and then making that demolition a condition of their gift, the taxpayers themselves became responsible for that decrease in value, even if the fire department provided the mechanism to accomplish it," wrote 7th Circuit Court of Appeals Judge David Hamilton. "None of the value of the house, as a house, was actually given away."

In the court's decision, Hamilton cited Dudley, although not by name. 

"We ascribe no sinister motives to the [homeowners] in seeking this deduction, who could reasonably rely upon [circuit precedent] to conclude that their proposed valuation might be allowed," Hamilton wrote. "A brief look at Google uncovers news stories about similar donations and attempted donations by an ESPN commentator, a former Oregon gubernatorial candidate, and a New York investment banker."

Dudley, who works as a Lake Oswego investment adviser, has kept a low profile since his narrow 2010 loss to now-Gov. John Kitzhaber, a Democrat, but he has not ruled out another run for office.