SUPPORTING STATEMENT
REG-105946-00
CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
The information is needed by taxpayers who assume the obligation to account for the income from long-term contracts as the result of certain nontaxable transactions.
USE OF DATA
The information will enable taxpayers to assume the obligation to account for the income from long-term contracts following certain nontaxable transactions.
USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
We have no plans to offer electronic filing. IRS publication, regulations, notices and letters are to be electronically enabled on an as practicable basis in accordance with the IRS Reform and Restructuring Act of 1998.
EFFORTS TO IDENTIFY DUPLICATION
We have attempted to eliminate duplication within the agency wherever possible.
METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES
Not applicable.
CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES
Not applicable.
SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE INCONSISTENT WITH GUIDELINES IN 5 CFR 1320.5(d)(2)
Not applicable.
CONSULTATION WITH INDIVIDUALS OUTSIDE OF THE AGENCY ON AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS
A notice of proposed rulemaking was published in the Federal Register on February 16, 2001 (66 FR 10643). No public hearing was requested or held. A final regulation was published in the Federal Register on May 15, 2002 (67 FR 34603).
We received no comments during the comment period in response to the Federal Register notice dated October 2, 2006, (71 FR 58052).
EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS
Not applicable.
ASSURANCE OF CONFIDENTIALITY OF RESPONSES
Generally, tax returns and tax return information are confidential as required by 26 USC 6103.
JUSTIFICATION OF SENSITIVE QUESTIONS
Not applicable.
ESTIMATED BURDEN OF INFORMATION COLLECTION
Under reg. §1.460-6(g)(3)(ii)(C): A taxpayer that has reported income from a long-term contract under the PCM (percentage-of-completion method) or PCCM (70/30 percentage-of-completion/capitalized cost method) for either regular or alternative minimum tax purposes is required to provide the following information to the taxpayer that has assumed that obligation as the result of certain nontaxable transactions:
(1) The portion of the contract reported by the old taxpayer under PCM for regular and alternative minimum tax purposes (i.e., whether the old taxpayer used PCM, the 40/60 PCCM method, or the 70/30 PCCM method);
(2) The submethod used to apply PCM (i.e., the simplified cost-to-cost method or the 10-percent method, or neither);
(3) The amount of total contract price reported by year;
(4) The numerator and the denominator of the completion factor by year;
(5) The due date (not including extensions) of the old taxpayer’s income tax returns for each taxable year in which income was required to be reported;
(6) Whether the old taxpayer is a corporate or a noncorporate taxpayer; and
(7) Any other information required by the Commissioner by administrative pronouncement.
The information must be provided by the due date (not including extensions) of the first taxpayer’s income tax return for the taxable year ending with, or the first taxable year ending after the transaction. It is estimated the above requirements will affect 5,000 respondents per year, with a burden of approximately 2 hours per respondent, for an annual burden of 10,000 hours.
Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time.
ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
As suggested by OMB, our Federal Register notice dated October 2, 2006 (71 FR 58052), requested public comments on estimates of cost burden that are not captured in the estimates of burden hours, i.e., estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. However, we did not receive any response from taxpayers on this subject. As a result, estimates of the cost burdens are not available at this time.
ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT
Not applicable.
REASONS FOR CHANGE IN BURDEN
There is no change in the paperwork burden previously approved by OMB. We are making this submission to renew the OMB approval.
PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION
Not applicable.
REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE
We believe that displaying the OMB expiration date is inappropriate because it could cause confusion by leading taxpayers to believe that the regulations sunset as of the expiration date. Taxpayers are not likely to be aware that the Service intends to request renewal of the OMB approval and obtain a new expiration date before the old one expires.
EXCEPTIONS TO THE CERTIFICATION STATEMENT ON OMB FORM 83-I
Not applicable.
Note: The following paragraph applies to all of the collections of information in this submission:
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless the collection of information displays a valid OMB control number. Books or records relating to a collection of information must be retained as long as their contents may become material in the administration of any internal revenue law. Generally, tax returns and tax return information are confidential, as required by 26 U.S.C. 6103.
| File Type | application/msword |
| Last Modified By | J11FB |
| File Modified | 2006-12-12 |
| File Created | 2006-12-12 |