ATTORNEY APPLAUDS TREASURY FOR BREVITY OF PASSIVE ACTIVITY REGS.

I have just finished reading Prop. Reg. section 1.469-4. This is short and to the point and, as a substitute for Temp. Reg. section 1.469-4T (which went on, and on, and on, and on), it is a major achievement toward moving tax regulations back to a more sensible and administrable format. We have spent too long chasing the idea that more detail means more certainty -- only to find that idea an illusion which produces the opposite.

My enthusiasm about this effort is so great that you and the others at Treasury should be able to hear my applause all the way to Washington. I hope you will be hearing the same from many others.

Were I to make any suggestions for change in the proposed regulation, they would be for further shortening -- by eliminating three of the five factors that the proposed regulation says should be given weight, namely the factors of common control, common ownership, and geographical location. Perhaps I am missing something, but these do not seem persuasive to me. But that is a quibble in comparison with the major achievement that the approach taken in this proposed regulation represents.

What a watershed! Congratulations to you and the others at Treasury.

Sincerely,