Friday, October 12, 2012
IRS Objects to Solyndra's Bankruptcy Plan, Says Owners Manipulated Rules to Preserve $975 Million in NOLs
Washington Times: IRS Says ‘Tax Avoidance’ at Heart of Solyndra Bankruptcy Plan:
The IRS urged a bankruptcy judge to reject solar panel maker Solyndra LLC’s bankruptcy plan Wednesday, saying it amounts to little more than an avenue for owners of an empty corporate shell to avoid paying taxes. “The undeniable conclusion is that tax benefits drive this plan,” attorneys for the IRS wrote in a bankruptcy pleading.
Arguing that the bankruptcy court ought not confirm a plan “whose principal purpose is tax avoidance,” attorneys said in filings in U.S. Bankruptcy Court in Delaware that the tax breaks would be worth more money than funds set aside for creditors.
Taxpayers are on the hook for more than a half-billion dollars after the company filed for bankruptcy last year, just two years after winning a loan guarantee from the Department of Energy.
What’s more, government attorneys said that as far back as 2010, Solyndra owners had “planned meticulously” to be able to use Solyndra’s net operating losses to offset future tax liabilities. “The only reason for the shell corporation to exist post-confirmation is to enable its owners to exploit these tax attributes, which would be lost in liquidation,” the IRS argued in court papers. One owner valued the so-called tax attributes at $150 million, dwarfing the $7 million to $8 million set aside by the reorganization plan for unsecured creditors, according to the government’s objection, which was filed by the Justice Department on behalf of the IRS.
- Bloomberg, Solyndra Bankruptcy Plan is Opposed by IRS, Energy Dept.
- The Hill, IRS Slams Solyndra Bankruptcy Plan
- Reuters, Solyndra Investor Sought Tax Breaks as Bankruptcy Loomed-Filing
- Washington Post, Attorneys for IRS, Energy Department Object to Solyndra Bankruptcy Plan
(Hat Tip: InstaPundit.)