WATER ABLAZE - Patagonia Sin Represas

Such deals simply provided a means of “optimising” or “re-organising”
one’s taxes.
During the heated debates which took place, I held the view that all
CBL deals, whether LiLo, SiLo or Service Contracts, were inadmissible
because they were sham transactions with no economic substance
whatsoever of the kind described in the doctrine of substance over
form. Those politicians responsible for the CBL deals argued that this
did not apply to their contracts in any way.
Meanwhile, the facts speak for themselves. In the middle of
2008, Douglas Shulman, Commissioner of the IRS, the U.S. agency
responsible for tax collection and tax law enforcement, requested the
around 100 U.S. investors to definitively and voluntarily end their
CBL contracts by December 31, 2008, otherwise these contracts would
be rescinded via official channels. This is what he wrote on the IRS
website:
In the last several years, the IRS has reinvigorated its enforcement
program. A major part of this has been the IRS’ stepped-up efforts to
detect and deter aggressive tax shelters. We have been particularly
effective in rooting out these tax shelter transactions. And I have said
publicly that during my tenure here at the IRS, you can expect these
efforts to continue. Promoters and participants in aggressive tax
shelters should know that the IRS will remain vigilant.
Our success in uncovering tax shelters, however, is just the start
of the process of resolving these problems. Today, I am pleased to
announce that the IRS has decided to launch a settlement initiative
for both Lease-in/Lease-out (LiLo) and Sale-in/Lease-out (SiLo)
transactions. Under the initiative, more than 45 of the nation’s
largest corporations that participated in these shelters will receive a
letter with the offer. Shelter participants will have 30 days to make a
decision to accept the offer.
To refresh everyone’s memory: LiLos and SiLos involved complex
and convoluted purported leasing arrangements in which some of
the nation’s largest corporations supposedly leased or purchased
large assets, such as foreign rail systems or sewer systems, and
immediately leased them back to their original owners. Under the
126