Reg 209835-86.Sup_Stmnt

SUPPORTING STATEMENT

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Section 902 provides a mechanism by which foreign income taxes paid or accrued by a foreign corporation may be deemed paid by a U.S. corporate shareholder that owns directly at least 10 percent of the voting stock of the foreign corporation at the time it receives a dividend from the foreign corporation.

2. USE OF DATA

The collection of information in this regulation is in section 1.902-1(e). This information is required to implement section 902 of the Internal Revenue Code and is the same information required on Form 1118. The respondents are U.S. corporations that claim a credit for foreign taxes deemed paid under section 902.

3. 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.

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

We have been unable to reduce burden for small businesses.

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

The notice of proposed rulemaking was published in the Federal Register on January 6, 1995 (60 FR 2049). No public hearing was requested or held. The final regulations were published in the Federal Register on January 7, 1997 (62 FR 923).

In response to the Federal Register notice dated November 19, 2009 (74 FR 60035), we received no comments during the comment period regarding Regulation 209835-86.

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 1.902-1(e) requires a domestic corporation claiming a

credit for foreign taxes deemed paid under section 1.902-1(b)

to furnish the same information with respect to the taxes

deemed paid that it is required to furnish under section

1.905-2 with respect to foreign taxes that it actually paid

or accrued. That is, the domestic corporation must submit

Form 1118. The burden for this requirement is reflected in

the burden for Form 1118.

Estimates of the annualized cost to respondents for the hour

burdens shown are not available at this time.

13. ESTIMATED BURDEN OF INFORMATION COLLECTION

As suggested by OMB, our Federal Register notice dated November 19, 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 WHY DISPLAYING THE OMB EXPIRATION DATE IS

INAPPROPRIATE

We believe that displaying the OMB expiration date is

inappropriate because it could confusion by leading

taxpayers to believe that the regulation sunsets 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.