Comment on FR Doc # E7-14489

Re: Section 67 Limitations on Estates and Trusts; REG-128224-06; 72 Federal Register 41243 (July 27, 2007) To Whom It May Concern: The Committee of Banking Institutions on Taxation ("CBIT") appreciates the opportunity to comment on the Internal Revenue Service?s proposed amendments to regulation 26 CFR 1.67. CBIT consists of national and state banks, trust companies, private banking institutions and institutional banks. CBIT?s objectives are (a) to cooperate in assisting in the administration of tax laws; (b) to disseminate among its members information pertaining thereto; and (c) to act as a clearing house for communications to or for instruction from federal and state tax authorities. Many CBIT members provide fiduciary and related services to customers of all kinds, including individual and institutional clients. Such services include trust administration, investment management, custody of assets, tax preparation and accounting. In providing these services, institutional fiduciaries (such as banks or trust companies) must follow strict duties of loyalty, prudence, and care to the trust and its beneficiaries, and are subject to potential liability. To compensate for providing these services and the potential liability, institutional fiduciaries charge fees, the deductibility of which would be governed by the proposed amendments. Thus, CBIT has a substantial interest in the laws governing the deductibility of fees charged by institutional fiduciaries. The American Bankers Association has submitted comments to the Proposed Regulations [REG-128224-06] via their letter dated October 24, 2007. CBIT agrees with the principles stated in such letter. The ABA?s letter sets forth the proper conclusion that the proposed regulations should not be finalized at this time and that the fees charged by institutional trustees should be fully deductible and not subject to the 2% floor. The full deductibility of these fees is supported by the plain language and legislative intent of IRC ? 67(e), and the uniqueness of the fiduciary responsibilities set forth under state law and the governing instrument. Full deductibility will also reduce costs for trust beneficiaries. CBIT also agrees with the ABA?s comments that the Proposed Regulations should not be finalized at this time, and that comments should be allowed up to 90 days following the U.S. Supreme Court?s decision in Rudkin. We thank you for the opportunity to present our comments and welcome the opportunity to discuss our comments further with you or others at the IRS. Please feel free to contact me at (212) 552-3297, or Adam Rosenberg at (302) 830-4352.