SUPPORTING STATEMENT
Revenue Procedures 98-46 and 97-44
1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Sections 472(c) and (e)(2) of the Internal Revenue Code provide that a taxpayer may use the LIFO inventory method for federal income tax purposes only if it has used no method other than LIFO in inventorying goods to ascertain its income, profit, or loss for the taxable year in a report or statement to owners or for credit purposes. When a taxpayer violates section 472(c) or (e)(2), the Commissioner may require the taxpayer to change to another inventory accounting method. These revenue procedures permit automobile dealers and medium - and heavy-duty truck dealers that violated the requirements of section 472(c) or (e)(2) to continue using the LIFO inventory method for federal income tax purposes.
2. USE OF DATA
The information will be used by taxpayers to aid them in complying with the terms of the revenue procedure. The information will also be used by the Internal Revenue Service to verify taxpayers' compliance with the terms of the revenue procedure.
3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
Low volume compared to cost of electronic enabling.
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
Revenue Procedure 97-44 was published in the Internal Revenue Bulletin on October 14, 1997 (1997-41 IRB 8). Revenue Procedure 98-46 was published in the Internal Revenue Bulletin on September 8, 1998 (1998-36 IRB 21).
In response to the Federal Register Notice dated October 27, 2009 (74 F. R. 55288), we received no comments during the comment period regarding Rev. Proc. 98-46 and 97-44.
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
Section 5 of the Revenue Procedure 97-44 requires that an automobile dealer's application for relief under the revenue procedure include certain information regarding its inventory accounting method. We estimate that approximately 5,000 automobile dealers will apply for relief under the revenue procedure and that it will take approximately 20 hours to make this application. The total time estimate for automobile dealers to meet this reporting requirement is 100,000 hours.
Revenue Procedure 98-46 modifies Revenue Procedure 97-44 by allowing medium-and heavy-duty truck dealers to take advantage of the favorable relief provided in Revenue Procedure 97-44. The burden is reflected in the burden of Revenue Procedure 97-44.
Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time.
13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
As suggested by OMB, our Federal Register notice dated October 27, 2009, 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 FOR 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 revenue procedures 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 information are confidential, as required by 26 U.S.C. 6103.
| File Type | application/msword |
| Author | TQ1FB |
| Last Modified By | J11FB |
| File Modified | 2010-03-10 |
| File Created | 2006-11-21 |