Compliance Report on Fraudulent Solar Energy Tax Scheme

Part 1: Recent Compliance Problem and Enforcement Action

In the article, the industry faced with the compliance problem is the energy industry. According to the article, the accused were doing business that involves the promotion and selling solar lenses, and, therefore, were enjoying tax deduction regarding energy credit in some energy properties such as solar energy.

Is your time best spent reading someone else’s essay? Get a 100% original essay FROM A CERTIFIED WRITER!

Order now

The non-compliance behavior in the case was the use and promotion of an abusive tax scheme which involved false solar energy credits and the tax deduction. The business model that was used conducting the energy-related business was based on false and fraudulent conduct where they enjoyed tax deductions regarding energy credit, yet in the real sense, they were not supposed to get tax deductions because they sold parts of the solar energy production equipment and not the actual energy production solar. Had this been the case, the company, as well as the customers, would have qualified for the energy credit. This illegal activity took place between 2005 and 2018 when the alleged companies failed to comply with tax laws (Department of Justice).

The court took action on this behavior on Friday, October 5, 2018.

As a punishment for the non-compliance, the enterprises the court ordered the tax schemes promoters to disgorge $50 million from the business in gross receipts. Also, the accused were barred from promoting and marketing their business.

To prevent the behavior from happening in future, the company will have to inform its customers they are not legible for tax benefits if they buy a solar lens, and they each customer should pay proper tax for each product bought.

Part 2: My Opinions of the Recent Problem and Enforcement Action

According to the article, it is clear that the company's behavior was illegal and unacceptable. The company had identified a loophole in the tax system, and it opted to use it against the law, thus negatively affecting the economy of the country. The action by the company to tell their solar lens to their customers with purported tax deduction was just a way of promoting their business and not to make their product affordable to their customers. This is because the price in which they sold those solar lenses were too high compared to the lower cost that the company uses to produce the product. This high amount of profit generated by the company buying a single solar lens is proof that the concept of energy credit was just a promotional concept.

The government intervention of deduction of 50 million dollars from the gain of the businesses was the best intervention because it helped in recovering the taxes that had been lost through the tax dodging scheme promoted by the company. Also, the company ordered the company to avoid promoting their products by claiming that the buyers will benefit from a tax deduction. This measure is important in protecting innocent citizens, who may not be aware of the tax compliance policies, from engaging in illegal activities which may lead them to non-compliance problems.

The non-compliance behavior discussed in the article has great impacts on both the industry as well as the general public. The first impact on the industry is that it negatively affects the competitiveness of the industry because other firms in the industry will be disadvantaged regarding the pricing of their product. Firms which do not pay tax tend to sell their products at a cheaper price compared to those paying tax. This often leads to a decline in the demand of the products subjected to tax. On the other hand, the non-compliance behavior in the article had the greatest harmful impact on the public because it deprives the government money to finance important public projects and service such as security, health, education and road infrastructures. These projects and services are of greatest benefits to the general public.

Part 3: My Opinions on the Role of Compliance in Business

Before this assignment, had little knowledge about Governance, risk management, and compliance, however, after reading the articles in the assignment my understanding of GRC has greatly changed. Now, I know that GRC implies to the leadership processes undertaken by a business to achieve its intended goal; managing and prediction the possible risk that the business may face, and adhering to laws and regulations for the general benefit of the business organization and the public in general.

Before this assignment, I was aware that compliance is its industry. One of the reasons why compliance has become an industry is because, nowadays, people have come up with business organizations whose main function is to ensure that other business organizations comply with the rules and regulations affecting their businesses. These compliance businesses are often hired by startup companies or large corporations to guide them or ensure that their businesses meet legal requirements as per the law to avoid unnecessary lawsuits for non-compliance.

1. Senior manager, product management at Amazon, with a salary of $122k-$173k
2. Assistant Restaurant Manager at Habit burger grill with a salary of $45k-65k
3. Assistant Director, healthcare facilities management at Crothal Healthcare with a salary of $49k-$106k
4. Board Certified behavior analysts (BCBA) at love 2 learn to consult with the salary of $10-$20 per hour.

In the above four jobs, I may qualify for only three after graduation. This is because they are within my area of specialists in education. I will not qualify for Assistant Director, healthcare facilities management because it is not within my area of study. For one to get such a job, he/she must comply with the requirement, such as one must be registered by the American medical directory, of which I will never be since I am not a student in any medical field. From the above job title, it is clear those compliance jobs are well paying compared to others (Glassdoor).

If I take a job that does not have compliance in the job title, then my job specifications, duties, and responsibilities will deal with non-compliance duties. I do not expect to perform any compliance activities in the future because it will be against the law and I may find myself in legal cases with the relevant compliance authorities. In every company, not everybody is responsible for compliance but only those who have been trained and certified with compliance.

In the next five to ten years, the compliance function will expand, with almost everybody required in any job to meet the compliance requirements, especially on security and safety issues. In almost all jobs, people will be required to be trained in security and safety issues in their job to help the government in identifying any national threats which are becoming a headache to the government.

Works Cited

Department of Justice. "Federal Court Orders Tax Scheme Promoters to Disgorge $50 Million in Gains From Fraudulent Solar Energy Tax Scheme | OPA | Department of Justice." U.S. Department of Justice. N.p., n.d. Web. 8 Nov. 2018.

Glassdoor. "Glassdoor Job Search | Find the Job That Fits Your Life." Glassdoor. N.p., n.d. Web. 8 Nov. 2018.