Opinion ID: 4543040
Heading Depth: 2
Heading Rank: 2

Heading: Factual Background – The Abusive Tax Scheme

Text: Mr. Johnson and Mr. Shepard, through RaPower, IAS, and LTB, marketed to the public the opportunity to participate in a solar energy leasing program in 3 exchange for certain tax benefits. Mr. Johnson claimed to have invented a solar energy technology that used solar lenses placed on towers. Under the advertised scheme, customers would buy or lease a solar lens that purportedly would be installed at a site in Utah. Customers then would lease the lens to LTB to produce electricity. Defendants told customers they could claim personal tax credits and deductions because they would be in the “trade or business” of leasing solar energy. See 26 U.S.C. §§ 48, 167(a). Defendants sold nearly 50,000 solar lenses and collected approximately $50 million in gross receipts. But contrary to their representations, they did not install most of the purchased solar lenses or use them to generate electricity. Meanwhile, customers claimed unwarranted tax deductions and credits on personal tax returns.1