Charles Kirkland of Paradise Valley, Arizona, came up with a scheme to sell solar tax losses and credits to unsuspecting taxpayers. Based on this fraud, he was sentenced to eight years in prison and must pay over $50M in restitution.
Kirkland falsely claimed, in various tax filings, to have generated a loss of $135M by investing in solar energy equipment. He then sold those losses and energy credits to taxpayers through a network of CPA’s and other taxation professionals in order to claim income tax refunds.
The problem is that he never made the majority of the investments, and the losses were fabricated. He used a web of LLC’s to create the fraudulent losses and energy credits.
Taxpayers then filed amended returns claiming the losses and credits against taxes paid on prior year returns. Once the fraudulent refunds were tendered, Kirkland received up to 90% of them as payment.
Kirkland, who pled guilty last January, now owes $51,615,484 in restitution, and another $1M fine, not counting the up to eight years he will spend in the joint.
Two days after his plea deal was inked, his wife began divorce proceedings. In those proceedings, Kirkland agreed that his wife would receive full ownership of their more than 100 real estate parcels, 5 Teslas, and the couple’s 10,000 square foot mansion in Arizona. The government has said that it will continue to pursue those assets in order to satisfy the restitution agreement.
It should be noted that under legislation recently signed into law, green energy credits are completely saleable. Anyone having nothing whatsoever to do with creating green energy, can purchase these credits to save money on their taxes.
The problem in this particular case is that the majority of the investments did not actually occur.
The fact that tax practitioners aided in the sale of these losses and credits does nothing but add to the problem. It makes you wonder just how shady the practitioners were.
In taxation, if it sounds too good to be true, it probably is.
Let me leave you with this.
The Internal Revenue Service recently did an about face on allowing High Deductible Health Plans (HDHP) to cover Covid 19 costs. Beginning in 2025, HDHP’s won’t be able to provide benefits for the testing or treating of C-19 without a deductible or at least charging one below the plan’s minimum deductible.
This new order rescinds guidance from three years ago. Nothing will change on your existing plans prior to 2024.
IRS moves like this make me scratch my head and ask questions. How much could these benefits actually cost eighteen months from now? How many taxpayers will this aggravate? What’s their motivation? How does this help anyone get re-elected?
Like most things in taxation, don’t look for logic. Anyone who does what I do for a living having the audacity to look at you and say that taxes are either reasonable or fair, should probably get their head examined.
We’re all going to get through this. Let’s get through it together.
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