IRS objects to Solyndra bankruptcy plan, Kaiser firm tax breaks

Interesting story from Reuters earlier this week: The IRS has filed an objection to the bankruptcy plan of Solyndra, the failed solar panel manufacturer that had been backed by Federal loan guarantees and the investment arm of the George Kaiser Family Foundation:

Solyndra's bankruptcy plan could prove a further embarrassment to the administration if it is seen rewarding risk-driven venture capitalists ahead of unsecured creditors such as suppliers and laid-off staff.

In its court filing on Wednesday, the IRS opposed Solyndra's plan. If approved by creditors, a holding company would emerge from bankruptcy with no employees or business operations - but as much as $350 million in tax breaks that could be used by Solyndra's investors, including Argonaut Ventures.

Argonaut is the investment arm of a foundation tied to the Democratic fundraiser, Oklahoma billionaire George Kaiser. Most of the tax breaks would come in the form of Net Operating Losses (NOLs) which could be used to offset future taxable income.

Meanwhile, under the bankruptcy plan Solyndra's creditors would receive pennies on the dollar, the IRS said, adding that the principal purpose of the plan is "tax avoidance."...

The IRS cited emails from Kaiser to one of the venture firm's managing directors.

"I would go a long way to preserve the NOLs," Kaiser wrote in December 2010.

As Argonaut, Solyndra and its tax professionals worked to determine the amount of tax breaks available to Solyndra, the company's chief financial officer was advised to delay a particular transaction which would have reduced the available NOLs by $100 million, the court filing said.