RP-2010-9 Supporting Statement

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SUPPORTING STATEMENT

(Revenue Procedure 2010-9)

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

This revenue procedure replaces Rev Proc. 2009-9, 2009–2 I.R.B. 256, which is outdated. These procedures pertain to the application process for organizations seeking recognition of exemption from Federal income tax under section 501 of the Internal Revenue Code. Most organizations seeking recognition of exemption submit a numbered IRS application form that has been approved and numbered by OMB, but certain organizations are required to submit a letter application. OMB approval of these procedures is necessary to cover these letter application cases.

2. USE OF DATA

The information that is collected through a letter application will be used by the Service to determine whether the organization meets the legal requirements for tax-exempt status. It will also be used to help the Service delete certain information from the text of an adverse determination letter or ruling before it is made available for public inspection as required by section 6110 of the Code.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

We have no plans at this time to offer electronic filing of letter applications because of the low volume compared to the cost of electronic enabling.

4. EFFORTS TO IDENTIFY DUPLICATION

Not applicable.

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

This particular collection of information affects only a small number of nonprofit organizations, and the burden is less than that of nonprofit organizations that must submit one of the numbered IRS exemption application forms.

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 THE AGENCY ON AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS

In response to the Federal Register notice dated February 4, 2010 (752 FR 5858), we received no comments during the comment period regarding Revenue Procedure 2010-9.

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

Not applicable.

10. ASSURANCE OF CONFIDENTIALITY OF RESPONSES

The rules for the disclosure of approved letter applications are set forth in section 6104 of the Code, and the rules for the confidentiality of tax returns and return information are set forth in section 6103.

11. JUSTIFICATION OF SENSITIVE QUESTIONS

Not applicable.

12. ESTIMATED BURDEN OF INFORMATION COLLECTION

Based on the number of letter applications received in recent fiscal years, we can expect to receive approximately 20 letter applications per year. Because of the simplicity of the letter application process, we estimate the average amount of time required per applicant will be 10 hours. This results in a total estimated burden of 200 hours annually.

13. ESTIMATED TOTAL ANNUAL COST BURDEN TO TAXPAYERS

Some respondents will have their own staff prepare the letter application and associated documents, while others may retain the services of tax professionals to prepare the application.

As suggested by OMB, our Federal Register notice dated February 4, 2010, 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 are no changes to the burden previously approved by OMB. This submission is for renewal purposes only.

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 would cause confusion by leading tax-exempt organizations to believe that the revenue procedure sunsets as of the expiration date. Taxpayers may not 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 the 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.