The below editorial originally appeared on the Las Vegas Review-Journal Website.
Peter Gunnerman is the kind of entrepreneur the government should be lauding. But that’s rarely government’s way, even for businesses in a politically favored industry such as clean energy.
As reported by the Review-Journal’s Sean Whaley, due to what Mr. Gunnerman termed a series of inconsistent IRS rulings, his clean-burning fuel business was completely undermined. The Reno inventor created his GDiesel fuel several years ago and had been successfully selling it since 2010, counting among his clients Clark County, which used the fuel for its fleet. Mr. Gunnerman and his father invested $15 million in a large-scale production plant, and the company had expanded to as many as 28 jobs and had 40 million gallons of sales through March 2015.
But the plant has been shuttered since then. At issue was a series of conflicting assessments by IRS auditors over whether the company was a blender of alternative fuels. Mr. Gunnerman would say no, as did the first auditor. But a new auditor in 2013 said yes, which limited sales and chased off nearly all of Mr. Gunnerman’s clients. A third auditor agreed with the first, but by then, the funding — which now should include a $623,000 October mediation ruling that the IRS refused to accept — wasn’t available to restart production.
On the bright side, earlier this week, Mr. Gunnerman announced a financing partnership that not only will allow production, but nationwide expansion. That’s great news for Mr. Gunnerman, but it doesn’t change the fact that IRS busybodies nearly ruined his innovative company. Mr. Gunnerman’s plight further demonstrates the need for tax simplification and reforms that make the IRS less powerful and prevent these kinds of debacles from happening again.