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Aiding another worthy industry
December 10, 2008
It appears that Congress might move to bail out another struggling industry: America's beleaguered tax-shelter enablers.
Many local transit agencies "sold" their assets in "LILO" or "SILO" deals to enable taxpayers to generate depreciation and interest deductions to shelter their income. When the IRS blocked the tax benefits, the "buyers" wanted out. Many of the deals were guaranteed by AIG; when its finances collapsed, it threw the agencies into default, entitling the shelter participants to penalties under the agreements.
Now Congress may step in to guarantee the agencies' liabilities under these deals. That will teach them not to participate in future tax shelters, for sure.
UPDATE: The TaxProf has more.
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