Some of our favorite recent tax fraud cases

This is a text version of a portion of an Accounting Today article that was originally published on Dec 1, 2015.

The original and complete article is here.

Some of our favorite recent tax fraud cases

Washington: The Justice Department has asked federal authorities to shutter a pair of tax fraud schemes.

In the first case, two Utah companies are running a nationwide abusive scheme that purports to use false deductions and claims of the solar energy credit to reduce their customers’ federal income tax liability, according to a complaint that seeks to stop Utah companies RaPower-3 LLC and International Automated Systems Inc.; Utah residents R. Gregory Shepard and Neldon Johnson; and Nevada company LTB1 LLC and Oregon resident Roger Freeborn, from facilitating and promoting the allegedly abusive tax scheme.

According to the complaint, the defendants promote an abusive tax scheme based on a purported solar energy generation facility in Millard County, Utah. The suit alleges that the defendants claim to own and operate technology that offers a “disruptive” and “revolutionary” approach to capturing and using solar energy. But, according to the complaint, the technology is a sham.

The complaint alleges that the defendants purport to sell “solar thermal lenses” – component parts of their technology – to individual customers. According to the complaint, the defendants claim that a customer who purportedly purchases a lens is entitled to claim depreciation and other business-related expenses and the solar energy credit on the customer’s individual income tax return.

The complaint also alleges that the IRS has disallowed the defendants’ customers’ claims of tax benefits from the solar energy scheme: Customers from across the country have filed at least 70 cases that are currently pending in Tax Court. The complaint estimates that losses from those cases alone exceeds $4 million.