I 
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. 
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 
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 Representa-
tives 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’’. 
VerDate Nov 24 2008 
21:29 Aug 03, 2009
Jkt 079200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H3439.IH
H3439
srobinson on DSKHWCL6B1PROD with BILLS
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 amend-
ed by adding at the end the following new section: 
‘‘SEC. 4965A. EXCISE TAX ON CERTAIN PROCEEDS RE-
CEIVED 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 im-
posed 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 ‘ineli-
gible 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 (in-
cluding the value of any property received and 
any additional amounts purporting to indemnify 
or reimburse the taxpayer for taxes assessable 
VerDate Nov 24 2008 
21:29 Aug 03, 2009
Jkt 079200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\H3439.IH
H3439
srobinson on DSKHWCL6B1PROD with BILLS
on any amounts received but excluding the ag-
gregate proceeds received by the taxpayer at-
tributable to or arising from any consensual 
termination or rescission of any such trans-
action), over 
‘‘(B) the aggregate proceeds described in 
subparagraph (A) that are received from third 
parties (other than the SILO/LILO lessee) pur-
suant 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 ar-
rangement 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 Rul-
ings 99–14 and 2002–69 and identified as a listed 
transaction in Notice 2000–15, or which is substan-
tially similar to such a transaction. 
‘‘(4) SILO/LILO LESSEE.—The term ‘SILO/ 
LILO lessee’ means any lessee in a SILO trans-
action or a LILO transaction that is— 
VerDate Nov 24 2008 
21:29 Aug 03, 2009
Jkt 079200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H3439.IH
H3439
srobinson on DSKHWCL6B1PROD with BILLS