Supp Stmnt

SUPPORTING STATEMENT

(Form 8875)

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Sections 542‑547 of the Tax Relief Extension Act of 1999, Pub. L. No. 106‑170 (the Act), amended the Internal Revenue Code, adding section 856(l), which permits the creation and ownership of taxable REIT subsidiaries by REITs, with certain limitations, effective tax years beginning after December 31, 2000.

The term taxable REIT subsidiary means with respect to a REIT, a corporation (other than a REIT) if the REIT directly or indirectly owns stock in the corporation, and the REIT and corporation jointly elect to treat the corporation as a taxable REIT subsidiary.

2. USE OF DATA

IRS uses the information to determine how many taxable REIT subsidiaries are in existence and to determine the aggregate amount of taxes being paid by such subsidiaries.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

Low filing volume does not justify the cost of electronic enabling for Form 8875.

1. EFFORTS TO IDENTIFY DUPLICATION

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

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

Not applicable.

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

Not applicable.

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

Not applicable.

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

Periodic meetings are held between IRS personnel and representatives of the American Bar Association, the National Society of Public Accountants, the American Institute of Certified Public Accountants, and other professional groups to discuss tax law and tax forms. During these meetings, there is an opportunity for those attending to make comments regarding Form 8875.

In response to the Federal Register Notice dated March 11, 2010 (75 FR 11636), we received no comments during the comment period regarding Form 8875.

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

Not applicable.

1. ASSURANCE OF CONFIDENTIALITY OF RESPONSES

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

2. JUSTIFICATION OF SENSITIVE QUESTIONS

Not applicable.

3. ESTIMATED BURDEN OF INFORMATION COLLECTION

The burden estimate is as follows:

Prior (2007)

Number of Time per Total

Responses Response Hours

Form 8875 1,000 7.66 7,660

Current (2010)

Number of Time per Total

Responses Response Hours

Form 8875 1,000 9.98 9,980

Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time.

4. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

As suggested by OMB, our Federal Register Notice dated March 11, 2010 (75 FR 11636), 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.

5. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

The primary cost to the government consists of the cost of printing Form 8875. We estimate that the cost of printing the form is $1,000.

1. 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.

2. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION

Not applicable.

17. REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE

See attachment.

17. 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.