USCIB Letter on U.S. Tax Implications of the EMU

May 4, 1998

Internal Revenue Service

Attn: CC:DOM:CORP:R (Announcement 98-18)

Courier's Desk

Internal Revenue Service

1111 Constitution Ave., N.W.

Washington, D.C.

Dear Sirs/Mesdames:

The United States Council for International Business (USCIB) appreciates the opportunity to respond to Announcement 98-18 on the U.S. tax issues raised by the conversion of certain European countries' currencies to a single European currency (Euro).

The USCIB advances the global interests of American business both at home and abroad. It is the U.S. affiliate of the International Chamber of Commerce, the Business and Industry Advisory Committee (BIAC) to the OECD, and the International Organisation of Employers. As such, it officially represents U.S. business positions in the primary intergovernmental bodies, and vis-…-vis foreign business and their governments.

We are pleased to convey to you the enclosed memorandum setting forth certain general principles and specific technical recommendations, which we urge you to adopt, in providing guidance to U.S. taxpayers with respect to the U.S. tax consequences of the conversion to the Euro.

While we did not directly address certain other relatively important issues not mentioned in the announcement, we would be more than pleased to elaborate further, or engage in discussions with IRS/Treasury staff persons, if you so desire.

Yours very truly,

Daniel A. Nichols

Chairman, Taxation Committee

Joseph E. McCole

Chair,Working Group on Tax Implications of EMU

Richard M. Hammer

International Tax Counsel