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I have never played against Tau before, but have seen them in action online. We aren't playing many points, so that is probably more to his advantage than mine.
I know he has only one vehicle (Piranha), not sure on other troops.

I'm considering bringing:

Kharn

9x Berzerkers
Icon of Wrath
Champ with dual LC

7x Havocs
4x AC
Mark of Nurgle
VotLW

Rhino

This comes out to 590pts. It seems like it may do well, just gotta get that rhino up as fast as possible and cross my fingers he doesn't blow it up before I get there.
Any suggestions or thoughts on if this sounds good to anyone else, or should I change it up.

I tend not to bring a bunch of expensive upgrades in smaller games. Does that champ really need 30pts worth of lightning claw? Against tau a chain axe may be fine. The havocs have a couple extra bodies, do the really need MoN and VotLW too given they'll be hanging back? Kharn is cheap as far as HQ's go but a lord with a power weapon is 80pts cheaper.

Things you could consider instead are a cultist squad. A dirge caster, combi-wep, and/or havoc launcher on the rhino. Also a small group of spawn, bikes, or raptors can really put fear in your opponent in a small game if you can scrape up the points

I don't know much about Chaos, but I'd go full Mech, and not so many points on one HQ. Tau Can amass so much fire power that 1 Rhino won't make it.

That army is good, in general.
But, if you want to minmax a little for playing against Tau I can give you some advice.

Tau aren't good in melee/CC, so making yourself stronger in melee isn't worth the points. 5 CSM with melee weapons can beat 12 fire warriors in melee just as well as 5 Khorne Berserkers but are cheaper. Against models that are good in melee, berserkers would be more appropriate then.

I would trade:
1) Kharn for a normal chaos lord with a power weapon and wings, or a terminator lord.
2) Berserkers for normal Chaos marines with maybe a melta-gun and a flamer.
3) The havoks' mark of nurgle and VoltLW for more marines somewhere else.

600p example army I would use against Tau if I really wanted to win without too much cheeze:
10x CSM, 2x melta, cc and NO bolters, rhino (195 points)
10x Plague Marines, 1x plasma gun, 1x melta gun (275 points)
Chaos Lord, Jump pack, The Black Mace, melta bombs, (130 points)(stick this guy in with plague marines and jump out with jump-pack, and onto his HQ squad when he is in range )

This is just an example, but I like it and it's well and even. Has that feel of CSM rushing at their targets and not too much shooting.


Ps. In your scenario since your friend has no tanks, I would trade all the melta guns, the meltabombs, and plasma gun for two more plague marines, if possible.

So we ended up tieing after 5 turns (roll missed for turn 6)

He had two small squads of fire warriors, a small squad of path finders, and his piranha

I did end up going with a:

Chaos Lord with jump pack and black mace
10x CSM with 2x flamers in rhino
7x Plague Marines with 2x Plasma in rhino

It wasn't bad actually, Chaos Lord was the star, along with Plague Marines. CSM were more of a distraction that anything else, never got close enough for Melee.

All in all it was fun and he now knows what else he will be buying to add to his army.

Thanks all for the suggestions and help.