[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3439 Introduced in House (IH)]
111th CONGRESS
1st Session
H. R. 3439
To amend the Internal Revenue Code of 1986 to impose an excise tax on
certain proceeds received on SILO and LILO transactions.
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IN THE HOUSE OF REPRESENTATIVES
July 31, 2009
Mr. Lewis of Georgia (for himself, Mr. Davis of Illinois, Mr. Pascrell,
and Mr. Moran of Virginia) introduced the following bill; which was
referred to the Committee on Ways and Means
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A BILL
To amend the Internal Revenue Code of 1986 to impose an excise tax on
certain proceeds received on SILO and LILO transactions.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Close the SILO/LILO Loophole Act of
2009''.
SEC. 2. EXCISE TAX ON CERTAIN PROCEEDS RECEIVED ON SILO AND LILO
TRANSACTIONS.
(a) In General.--Subchapter F of chapter 42 of subtitle D of the
Internal Revenue Code of 1986 is amended by adding at the end the
following new section:
``SEC. 4965A. EXCISE TAX ON CERTAIN PROCEEDS RECEIVED ON SILO AND LILO
TRANSACTIONS.
``(a) Imposition of Tax.--In the case of any person other than a
SILO/LILO lessee that receives any ineligible amount as a party to any
SILO transaction or any LILO transaction, such person shall pay a tax
for the taxable year in which such ineligible amounts are received.
``(b) Amount of Tax.--The amount of the tax imposed under
subsection (a) with respect to any person shall be an amount equal to
the aggregate ineligible amounts received by such person in the taxable
year.
``(c) Definitions.--For purposes of this section--
``(1) Ineligible amount.--The term `ineligible amount'
means, with respect to any SILO transaction or LILO
transaction, the excess of--
``(A) the aggregate proceeds received by the
taxpayer attributable to or arising from any remedial
action relating to such transaction (including the
value of any property received and any additional
amounts purporting to indemnify or reimburse the
taxpayer for taxes assessable on any amounts received
but excluding the aggregate proceeds received by the
taxpayer attributable to or arising from any consensual
termination or rescission of any such transaction),
over
``(B) the aggregate proceeds described in
subparagraph (A) that are received from third parties
(other than the SILO/LILO lessee) pursuant to a payment
arrangement (including a defeasance escrow arrangement)
in which the SILO/LILO lessee's payment obligations
were economically defeased in whole or in part.
``(2) SILO transaction.--The term `SILO transaction' means
a purported sale-leaseback arrangement which is identified as a
listed transaction in Notice 2005-13.
``(3) LILO transaction.--The term `LILO transaction' means
a transaction which is a `lease-in/lease-out' transaction
described in Revenue Rulings 99-14 and 2002-69 and identified
as a listed transaction in Notice 2000-15, or which is
substantially similar to such a transaction.
``(4) SILO/LILO lessee.--The term `SILO/LILO lessee' means
any lessee in a SILO transaction or a LILO transaction that
is--
``(A) a tax-exempt entity (within the meaning of
section 168(h)(2)) or any other cooperative, nonprofit,
limited dividend, or mutual association, or
``(B) any other person that does not derive a
substantial economic benefit from the tax
characterization of such transaction.
``(d) Certain Transfers Disregarded.--If any person who is subject
to the tax under subsection (a) is a party to any transaction that
results in the transfer of such person's rights with respect to a SILO
transaction or a LILO transaction to any other person who would, but
for this subsection, not be subject to the full amount of the tax under
subsection (a) with respect to such SILO transaction or LILO
transaction, then such transfer shall be disregarded for purposes of
this section and the taxpayer shall continue to be treated as the
recipient of any ineligible amount.
``(e) Regulatory Authority.--The Secretary is authorized to
promulgate regulations consistent with the purposes of this section,
including regulations to prevent the avoidance of such purposes.
``(f) Coordination With Other Taxes and Penalties.--The tax imposed
by this section is in addition to any other tax, addition to tax, or
penalty imposed under this title.''.
(b) Clerical Amendment.--The table of sections for subchapter F of
chapter 42 of subtitle D of the Internal Revenue Code of 1986 is
amended by adding at the end the following new item:
``Sec. 4965A. Excise tax on certain proceeds received on SILO and LILO
transactions.''.
(c) Effective Date.--The amendments made by this section shall
apply to amounts received after the date of the introduction of this
Act, in taxable years ending after such date.
SEC. 3. DENIAL OF DEDUCTION FOR COSTS OF CERTAIN ACTIONS RELATING TO
SILO AND LILO TRANSACTIONS.
(a) In General.--Part IX of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting after section
269B the following new section:
``SEC. 269C. COSTS OF CERTAIN ACTIONS RELATING TO SILO AND LILO
TRANSACTIONS.
``(a) General Rule.--If any party to a SILO transaction or a LILO
transaction (other than a SILO/LILO lessee) brings a remedial action
seeking to recover any ineligible amount with respect to such
transaction, in computing taxable income no deduction shall be allowed
for any attorney fees or other costs attributable to such action.
``(b) Definitions.--For purposes of this section, the terms `SILO
transaction', `LILO transaction', `SILO/LILO lessee', and `ineligible
amount' have the meanings given such terms by section 4965A(c).''.
(b) Clerical Amendment.--The table of sections for part IX of
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after the item relating to section 269B the
following new item:
``Sec. 269C. Costs of certain actions relating to SILO and LILO
transactions.''.
(c) Effective Date.--The amendments made by this section shall
apply to costs incurred after the date of the introduction of this Act.
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