Big 3 Auto Rescue Bill Bails Out Transit SILO Tax Shelters

Sentate Finance Committee Ranking Member Charles Grassley yesterday issued a press release protesting the inclusion of a transit SILO tax shelter guarantee in the pending Big 3 automobile bailout bill:

Senator Chuck Grassley said proposed legislation to help American automakers would put tax dollars on the line to assist participants in controversial tax shelters which have been shut down by both the IRS and Congress.

Grassley said the tax shelter bailout within the auto bailout is related to abusive leasing transactions called SILOs, where transit agencies have sold public transportation assets like rail lines, only to lease them back from purchasers, with the result of providing tax depreciation deductions to the purchasers. Such transactions were motivated solely by collection of fees on one side and tax benefits on the other, rather than any change to the services provided by transit agencies.

See Wall Street Journal: Transit Agencies May Get Help on Bad Tax Deals in Bailout, by Martin Vaughan.

Update: Senate Finance Committee Chair Max Baucus has issued a press release also condemning the inclusion of the SILO provision in the auto bailout bill.  See also:

• Roth & Co.: Aiding Another Worthy Industry
• Tax Lady Blog:  Transit Agencies May Get Help on Bad Tax Deals in Bailout