SUPPORTING STATEMENT
1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Foreign corporations are subject to U.S Income Tax on income that is effectively connected with a U.S. trade or business and are required to file a U.S Income tax return reporting taxable income. A CIP project has been approved (project code 0564) to investigate a select group of foreign corporate importers to determine if the importer has a U.S. Income Tax return filing requirement. However, based on the public information available, it is not readily determinable without further research that US Income Tax compliance has been fulfilled. Therefore, IDRS will be utilized to determine if filing compliance has been met. If an importer does not appear to have complied with filing requirements or if the importer has filed a protective Form 1120F, contact with the foreign importer will be initiated requesting further information to draw a conclusion on US tax liability. This contact letter is sent to taxpayers who appear to have a U.S. trade or business and have not filed a U.S. Income Tax return or filed a protective 1120F.
2. USE OF DATA
The information provided in response to the contact letter will determine the foreign corporation’s compliance requirement.
USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
The collection of information does not involve the use information technology due to risk of disclosure. Additionally, the information collection request will be required by the taxpayer only occasionally to determine tax compliance.
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
The target group of taxpayer’s contacted is only foreign corporation importers with annual imports of $50 million or more. Thus, contact letters will not be sent to small businesses or other small entities.
6. CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES
Collection will only be required on an occasional basis to a limited number of foreign corporation importers.
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
In response to the Federal Register notice (75 FR 66430), dated October 28, 2010, we received 1 comment during the comment period regarding the Foreign Based Importer Non-Filers Questionnaire.
A response to this public comment is pending.
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
The burden estimate is as follows:
Number of Time per Total
Responses Response Hours
Contact letters
requesting
additional information 30 1 hour 30
There is no additional burden. Estimates of the annualized cost to respondents are not available at this time.
13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
As suggested by OMB, our Federal Register notice (75 FR 66430), dated October 28, 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
The primary cost to the government consists of the cost of printing contact Letter minimal. We estimate that the cost of printing the letter is minimal.
15. REASONS FOR CHANGE IN BURDEN
There is no change in the paperwork burden previously approved by OMB.
This form is being submitted for renewal purposes only.
16. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION
Not applicable.
17. REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS
INAPPROPRIATE
Not applicable.
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.
*If emergency approval is needed, please give reason.
| File Type | application/msword |
| Author | Carol |
| Last Modified By | DHSNB |
| File Modified | 2010-12-30 |
| File Created | 2008-01-08 |