By Anthony Diosdi
Over the past few years, a company known as RaPower3 has marketed ownership in solar lenses to investors throughout the United States. Investors were promised ownership in solar lenses located throughout the Southwestern United States. Investors were also told that they could tax generous deductions on their tax returns associated with these solar lenses. Everything seemed fine until the United States Department of Justice showed up. and obtained an injunction against the promoters of RaPower3 from marketing ownership in the solar lenses.The U.S. Department of Justice obtained an injunction against RaPower3, International Automated Systems, LTB1, Gregory Shepard, Neldon Johnson, and Roger Freeborn. The Department of Justice asked a federal district court to shut down a multi-level marketing business involving solar lenses that were “purchased” and then alternatively leased to reduce federal income tax liability.
The United States Department of Justice also identified customers who they said claimed bogus tax credits and forwarded the names of these individuals to the Internal Revenue Service (“IRS”). The Department of Justice has alleged that the lenses were nothing more than thin sheets of plastic that have been exposed to desert conditions in Utah and either have fallen to the ground or were dangling from installed towers. The Department of Justice also claims that this sham operation has cost the U.S. Department of the Treasury millions in taxes. In addition, the Department of Justice and the IRS contends that RaPower3 transactions lack economic substance and their only purpose was to improperly reduce customers’ federal tax liabilities while enriching the defendants financially.
The IRS has been aggressively auditing individuals that have claimed deductions or tax credits associated with RaPower3 solar lenses. Unfortunately, most RaPower3 investors were blissfully unaware of any problems associated with claiming deductions and/or tax credits associated with RaPower3 lenses until a terse letter showed up from the IRS.
The IRS has been disallowing RaPower3 associated deductions and assessing severe penalties. A number of RaPower3 clients paid for and were provided IRS representation by the same firm that advised them to claim the very deductions that triggered an audit of their tax returns. This is a recipe for disaster and the IRS should never have allowed such representation. Anyone who invested in RaPower3 lenses should never have a “tax lawyer” or anyone else associated with that entity represent them before the IRS or any other government agency.
If you have invested in a RaPower3 tax plan, it is critically important that competent independent tax counsel as soon as possible to review your arrangement and determine the best way to mitigate your exposure to the IRS.
The tax attorneys at Diosdi Ching & Liu, LLP have advised and represented RaPower3 clients throughout the United States.
Anthony Diosdi is a partner and attorney at Diosdi Ching & Liu, LLP, located in San Francisco, California. Diosdi Ching & Liu, LLP also has offices in Pleasanton, California and Fort Lauderdale, Florida. Anthony Diosdi represents clients in federal tax controversy matters and federal white-collar criminal defense throughout the United States. Anthony Diosdi may be reached at (415) 318-3990 or by email: firstname.lastname@example.org.
This article is not legal or tax advice. If you are in need of legal or tax advice, you should immediately consult a licensed attorney.