SUPPORTING STATEMENT
REG-150562-03

1.	 CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

The collection of information is in § 1.1045-1(b)(4)(ii).   Any partner who recognizes all or a part of the partner’s distributive share of partnership section 1045 gain must notify the partnership of the amount of the partnership section 1045 gain that is recognized.  This information will be used by the partnership to make necessary adjustments to the basis of the replacement qualified small business stock.  In the absence of notification, the partnership must presume that the partner deferred recognition of the partnership section 1045 gain and decrease its basis in the replacement qualified small business stock by the partner’s distributive share of partnership section 1045 gain until such time as the partner provides notification of the amount recognized by the partner.

2.	USE OF DATA              

The information will be used by the partnership to make necessary adjustments to the basis of the replacement qualified small business stock.  
               
3.	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.

4.	EFFORTS TO IDENTIFY DUPLICATION

We have attempted to eliminate duplication within the agency wherever possible.  

5.	METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER       SMALL ENTITIES

Not applicable.

6.	CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES

Not applicable.

7.	SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE     INCONSISTENT WITH GUIDELINES IN 5 CFR 1320.5(d)(2)

Not applicable.

8.	CONSULTATION WITH INDIVIDUALS OUTSIDE OF THE AGENCY ON     AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS

REG-150562-03 was published in the Federal Register on July 15, 2004 (69 FR 42370).

We received no comments during the comment period in response to the Federal Register notice (72 FR 15192), dated March 30, 2007.

9.	EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO     RESPONDENTS

Not applicable.

10.	ASSURANCE OF CONFIDENTIALITY OF RESPONSES

Generally, tax returns and tax return information are confidential as required by 26 USC 6103.

11.	JUSTIFICATION OF SENSITIVE QUESTIONS

Not applicable.

12.	ESTIMATED BURDEN OF INFORMATION COLLECTION

The burden for the collection of information in §1.1045-1(b)(4)(ii).  Any partner that must recognize all or a part of the partner’s distributive share of partnership section 1045 gain must notify the partnership, in writing, of the amount of partnership section 1045 gain that is recognized by the partner.  It is estimated that the notification requirement will affect 1,000 taxpayers per year.  The estimated annual burden per respondent varies from 45 to 75 minutes, depending on individual circumstances, with an estimated average of 1 hour.  The total annual reporting burden is 1,000 hours.
      
13.	ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

As suggested by OMB, our Federal Register notice dated March 30, 2007, 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. 

14.	ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

Not applicable.

15.	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.

16.	PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION

Not applicable.

17.	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.

18.	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.