Letter to the Treasury on the NPR re: Guidance on Eligible Investments for Trump Accounts

To Whom it May Concern:

The American Bankers Association (ABA) appreciates the opportunity to comment on the Treasury Department's (Treasury) and the Internal Revenue's Service's proposed rulemaking regarding the guidance on eligible investments for Trump accounts (Proposal). We believe Trump accounts are an important tool to build generational wealth for America's youth.

ABA supports the IRS's objective of facilitating low-cost, long-term investing for children. To promote a workable and competitive trustee framework while protecting beneficiaries, ABA urges the IRS to adopt the following recommendations for the final regulation, as explained in more detail below:

• Provide a correction mechanism for monitoring failures;
• Establish monitoring and recordkeeping safe harbors;
• Protect trustees executing required liquidations; and
• Provide reliance protection for successor trustees.

In response to the request for comments regarding trustee fees, we encourage Treasury and the IRS to permit reasonable, transparent trustee fees.

A. Provide a Correction Mechanism for Monitoring Failures.

The Proposal could cause an account to retroactively lose its Trump account status, with detrimental tax consequences for the beneficiary if a trustee fails to identify an investment as ineligible in accordance with the periodic monitoring requirements. A compliant trustee may use the date of its next periodic determination or earlier actual knowledge to establish when an investment becomes ineligible. A noncompliant trustee must treat the investment as ineligible from the first day it ceased to qualify. Unless corrected within 30 days, the account ceases to be a Trump account and an IRA and is deemed to distribute all account assets.

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