IRS SILO-LILO Amnesty

"The [IRS] is offering a type of amnesty to more than 45 companies that engaged in complex leasing transactions that the agency has challenged as abusive tax shelters, an amnesty under which the firms would give up most of the tax benefits from the deals but avoid potential penalties. The transactions are known as SILOs or LILOs, for sale in-lease out or lease in-lease out. Long popular with banks, they involve companies' buying or leasing assets outside the U.S., such as telephone networks or railroad and power systems, then leasing them back to their original owners. Such arrangements created tax benefits for the U.S. companies, which claimed depreciation expenses for the assets on their tax returns", WSJ, 7 August 2008.

I read IRS Revenue Ruling 2002-69, 4 November 2002, available at www.irs.gov/businesses/corporations/article/0,,id=120633,00.html. I am amazed any CPA or attorney ever thought SILO and LILO would fly. I agree with the IRS's analysis, LILO and SILO lack economic substance. The IRS should go further and bar from practice in front of it any CPA or law firm which promoted SILO or LILO. For that matter, Mark Olson (MO) at the PCAOB, will you review the tax accrual workpapers of whichever CPA firms audited the banks and companies in question? Well MO?