Comment on FR Doc # E7-11062

My comments to be delivered in person at the September 26, 2007 meeting including the following: COMMENTS TO PROPOSED REGULATIONS FOR TREAS. REG. ?20.2036-1(c) (REG-119097-05) AT IRS OFFICES, SEPTEMBER 26, 2007 1. Introduction. 2. Preliminary Comments (a) Importance of Subject (b) Credit to Authors of Proposed Regulations (c) Reasons for Concern Over Proposed Regulations 3. Background 4. Specific Issues And Problems With The Proposed Regulations (a) The proposed regulations include an example reflecting a gross misunderstanding of the uses and economics of GRATs as those are used in the real world. (b) The GRAT inclusion rule chosen by the proposed regulations is built on false assumptions and faulty logic. (c) As a consequence of the preceding problems, the proposed regulations select the incorrect formula for determining the amount of a GRAT to be included under Section 2036(a)(1) when the annuity payment right is the only relevant retained interest. (d) The proposed regulations lead to inequitable results that do not treat similarly situated taxpayers similarly. (e) The proposed regulations exceed the statutory authority under Section 2036(a)(1). (f) The proposed regulations represent bad policy as applied to GRAT inclusion. (g) The proposed regulations do not address, nor do they even reflect any consideration of, alternative bases for determining the extent of GRAT inclusion. 5. Suggested Resolution 6. Conclusion I am also submitting a full letter (which will also be hand-delivered to the IRS). Thank you, Michael D. Whitty Winston & Strawn LLP 35 West Wacker, Suite 3800 Chicago, Illinois 60601-9703 (312) 558-5842, -5600 main, -5700 fax mwhitty@winston.com