Following up on Friday's post, IRS Says ‘Tax Avoidance’ at Heart of Solyndra Bankruptcy Plan: Wall Street Journal editorial, The Solyndra Memorial Tax Break:
How Energy Passed Out Tax-Loss Credits That Mean Taxpayers Will Pay Twice for Failure:
Perhaps you thought the Solyndra scandal amounted to a $535 million
government loan that will never be repaid. No such luck. In the latest
twist, Solyndra's investors could be rewarded for their failure, thanks to a tax benefit the Administration handed out in a bid to evade political accountability.The IRS exposed
this double Solyndra debacle last week in the U.S. bankruptcy court for
the district of Delaware, which is unwinding the defunct solar-panel
maker. The IRS formally objected to Solyndra's Chapter 11 reorganization
plan, claiming its "principal purpose is tax avoidance."Having sold off its manufacturing plant, fired nearly 1,000 workers
and proven the non-viability of its business model, Solyndra's only real
assets are what the IRS calls "tax attributes." These are between $875
million and $975 million in net operating losses that can reduce future
taxable income, which the IRS values as high as $350 million. Before it
went toes up, Solyndra also accumulated $12 million in solar tax credits
that can reduce tax liabilities dollar for dollar.Tax-loss carry-forwards are routine but worthless if a company can't
turn profits to pay taxes on. So Solyndra's owners are asking the court
to liquidate the rest of the business and contribute a net $6.7 million
to pay off creditors for pennies on the dollar. A holding corporation
will then emerge from Chapter 11 that won't make products or employ
workers, but it will get the Solyndra tax offsets.The dummy company is owned by Argonaut Ventures I LLC, Solyndra's
largest shareholder and the primary investment arm of the George Kaiser
Family Foundation. Mr. Kaiser is a Tulsa oil billionaire who bundled
campaign checks for Mr. Obama in 2008. …The larger problem is Mr. Obama's economic model that seeks to picks
winners and losers and misallocates capital. That's bad enough. But does
he have to stick it to taxpayers twice for the same failed investment?
