The Honorable Eric Solomon
Acting Assistant Secretary (Tax Policy)
U.S. Department of Treasury
1500 Pennsylvania Avenue, N.W.
The Honorable Mark W. Everson
Internal Revenue Service
1111 Constitution Avenue, N.W.
Re: Comments on REG-128767-04, Treatment of Disregarded Entities Under Section 752
The American Institute of Certified Public Accountants (AICPA) offers the following comments on the above-mentioned proposed regulation project. These comments were drafted by the Partnership Taxation Technical Resource Panel and approved by the Tax Executive Committee.
We believe the Proposed Regulations create (1) unnecessary complexity for taxpayers by providing two separate regimes for determining the allocation of partnership liabilities; (2) uncertainty for taxpayers by allowing a Disregarded Entity to potentially impact the allocation of partnership liabilities; and (3) significant and unnecessary compliance burdens for taxpayers the goals of which can better be addressed through application and/or amplification of the existing Section 752 Anti-abuse Rule. As a result, we recommend that the Proposed Regulations be withdrawn.
If you or your staff have any questions, please contact me at firstname.lastname@example.org; Debbie A. Fields, Chair of the AICPA Partnership Taxation Technical Resource Panel at email@example.com; or Marc A. Hyman, AICPA Technical Manager at firstname.lastname@example.org.
Thomas J. Purcell, Chair
Tax Executive Committee