SUPPORTING STATEMENT
CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Under §3121(v)(2)(A) of the Internal Revenue Code, any amount deferred under a nonqualified deferred compensation plan must be taken into account as wages for purposes of the tax imposed by the Federal Insurance Contributions Act (FICA) as of the later of (1) when the services are performed, or (2) when there is no substantial risk of forfeiture of the rights to such amount.
Section 31.3121(v)(2)-1(b)(1) defines a “nonqualified deferred compensation plan” as an plan or other arrangement that is established by an employer for one or more of its employees, and that provides for the deferral of compensation (within the meaning of §31.3121(v)(2)-1(b)(3)), other than a plan described in §3121(a)(5). Under §31.3121(v)(2)-1(b)(2), a plan is “established” on the latest of the date on which it is adopted, the date on which it is effective, or the date on which the material terms of the plan are set forth in writing. A plan also will be deemed to be set forth in writing if it is ser forth in any other form that is approved the Commissioner. The material terms of the plan include the amount (or the method or formula for determining the amount) of deferred compensation to be provided under the plan and the time when it may or will be provided.
USE OF DATA
The IRS will use this information to identify the material terms of a plan to determine the correct amount of FICA tax.
USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
IRS Publications, 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 January 25, 1996 (61 FR 2194), a public hearing was held on June 24, 1996. The final regulations were published in the Federal Register on January 29, 1999 (64 FR 4542).
We received no comments during the comment period in response to the Federal Register notice dated April 2, 2008 (73 FR 18036).
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 § 31.3121(v)(2)-1(b)(2), the material terms of the plan must be set forth in writing. The IRS estimates that the annual number of respondents will be 2,500; the burden per respondent varies from 2 hours to 10 hours, depending on the individual circumstances, with an estimated average of 5 hours; the estimated total reporting burden is 12,500 hours; and that the estimated frequency of responses is on time per respondent.
Under §31.3121(v)(2)-1(f), and employer withholding under the estimated method will make corrections for prior periods on Form 941, Employer’s Quarterly Federal Tax Return, Form 941C, Supporting Statement To Correct Information, Form W-2, Wage and Tax Statement, and Form W-2C, Statement of Corrected Income and Tax Amounts. Similarly, under §31.3121(v)(2)-1(g), and employer making optional adjustments for prior periods must report the adjustments on Form 941, Form 941C, Form W-2 and Form W-2C. The burden for these requirements is reflected on these forms.
ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
As suggested by OMB, our Federal Register notice dated April 2, 2008 (73 FR 18036), 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 |
| Author | J11FB |
| Last Modified By | J11FB |
| File Modified | 2008-07-25 |
| File Created | 2008-07-25 |