Ms. Shirley Sicilian

MTC Deputy General Counsel

444 North Capitol Street, NW, Suite 425

Washington, DC 20001

Re: Comments on Proposed Multistate Tax Commission Model Uniform Statutes

Dear Ms. Sicilian:

On June 16, 2005, the MTC Executive Committee approved for public exposure two model uniform statutes; i.e., the Model Uniform Statute on Reportable Transactions and Inconsistent Filing Positions, and the Model Uniform Statute on Tax Avoidance Transaction Voluntary Compliance Program. The first proposal would, among other things, (1) require disclosure of reportable and listed transactions and “inconsistent state filing positions,” (2) establish disclosure and list maintenance requirements for material advisors, and (3) impose substantial monetary penalties for the failure to comply with any provision of the model uniform statute. The second proposal would create a Voluntary Disclosure Program. The two model uniform statutes are intended to work in tandem and thus our comments are offered simultaneously.

On the same day, the Executive Committee made public some proposed amendments regarding “nexus information reporting” to the model reportable transaction statutes and asked the MTC’s Uniformity Subcommittee to review those amendments.

A public hearing on these model uniform statutes and corresponding amendments was held on Tuesday, September 27, 2005 in Washington, DC. The MTC has graciously extended its period for receiving written comments and to that end, we respectfully submit the following comments for consideration by the Executive Committee.

Our comments were drafted by our State and Local Taxation Technical Resource Panel (TRP) and approved by our Tax Executive Committee. Acknowledgement is given to TRP member Karen Nakamura for her major contribution to these comments.

Our recommendations include (1) changes to the reportable and listed transaction identification process, (2) changes to the definition of a reportable transaction, (3) elimination of provisions that attempt to set forth a statutory definition for economic substance, (4) removal of all provisions that would require the reporting of inconsistent filing positions, (5) adding a standard of application for material advisor reporting, (6) significant modifications to all penalty and penalty waiver provisions, (7) the incorporation of more equitable provisions in the voluntary compliance program initiative, and (8) a request to consider the impact of these model statutes on small and midsize business taxpayers.

If you have questions or would like clarification of our comments, please address your communications to me at tpurcell@creighton.edu; or Scott A. Salmon, Chair of the AICPA State and Local Taxation Technical Resource Panel, at ssalmon@kpmg.com; or Marc A. Hyman, AICPA Technical Manager, at or mhyman@aicpa.org.

Sincerely,

Thomas J. Purcell III, Chair

Tax Executive Committee

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