‘‘(A) a tax-exempt entity (within the mean-
ing of section 168(h)(2)) or any other coopera-
tive, nonprofit, limited dividend, or mutual as-
sociation, 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 tax-
payer 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 PEN-
ALTIES.—The tax imposed by this section is in addition 
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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 Inter-
nal 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 chap-
ter 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 trans-
action or a LILO transaction (other than a SILO/LILO 
lessee) brings a remedial action seeking to recover any in-
eligible amount with respect to such transaction, in com-
puting taxable income no deduction shall be allowed for 
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any attorney fees or other costs attributable to such ac-
tion. 
‘‘(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 trans-
actions.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to costs incurred after the date 
of the introduction of this Act. 
Æ 
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