November 22, 2005 Via Electronic Filing CC:PA:LPD:PR (REG-133578-05) Courier’s Desk Internal Revenue Service 1111 Constitution Avenue, NW Washington, DC 20044 Re: Proposed Rule on Dividends Paid Deduction for Stock Held in ESOP Dear Sir or Madam: The American Benefits Council (Council) appreciates the opportunity to comment on the proposed regulations concerning which corporation is entitled to the deduction for applicable dividends under Internal Revenue Code Section 404(k). The Council is a public policy organization representing principally Fortune 500 companies and other organizations that assist employers of all sizes in providing benefits to employees. Collectively, the Council’s members either sponsor directly or provide services to retirement and health plans that cover more than 100 million Americans. In addition to our comments below, we respectfully request that a hearing be scheduled on this issue and the Council would appreciate testifying at this event. The Council is very concerned that the regulations, as proposed, would discourage employers with a foreign parent from establishing or maintaining an Employee Stock Ownership Plan (ESOP), resulting in harm to their American employees. The proposed regulations would harm these workers by denying the tax deduction to American employers that have a foreign parent, effectively eliminating one of the primary motivations for employers to establish ESOPs for employees. ...