Supporting Statement

SUPPORTING STATEMENT
1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
This collection of information is required to implement Section 9008 of the Patient Protection and Affordable Care Act
(ACA), Public Law 111-148 (124 Stat. 119 (2010)), as amended by section 1404 of the Health Care and Education
Reconciliation Act of 2010 (HCERA), Public Law 111-152 (124 Stat. 1029 (2010)). Enactment of ACA Sec. 9008 allows
for a fee to be assessed against entities selling branded prescription drugs to specified government agencies, based in
part on controlled group status and credits allowed for qualified "orphan drugs".

2. USE OF DATA
The information must be provided to the IRS well before September 30th of each year the fee is due. The information
collected by the IRS will be used to determine the relationships amongst manufacturers and importers of prescription
drugs that result in the formation of a covered entity, and to determine which drugs are orphan drugs, the sales of
which are to be excluded when calculating a covered entity's fee.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
IRS is evaluating availability of improved technology to reduce burden. The form will be available for printing and
downloading from the IRS website "www.irs.gov". In future years efiling is expected to be allowed.

4. EFFORTS TO IDENTIFY DUPLICATION
The IRS will attempt to eliminate duplication wherever possible to the extent of the information provided by covered
entities engaged in the business of manufacturing or importing branded presciption drugs. This collection will facilitate
the matching of information from specified government agencies entities, which should reduce taxpayer contact to
verify the same information. Guidance is expected to allow the IRS to substitute available data where accurate data is
not or cannot be provided by the entity. The IRS has invited public comment on the duplication of filing requirements.

5. METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES
Generally, the burden for compliance will be scaled to size of entity, in that a lower level of sales will require less
reporting. This collection of information may allow IRS to reduce duplicative taxpayer contacts to verify data. Provision
allows IRS to use all available data to assess fee. Guidance is expected to allow the IRS to substitute available data
where accurate data is not or cannot be provided by the entity, which will reduce burden.

6. CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR
POLICY ACTIVITIES
The IRS and Treasury have determined that yearly recurrence is necessary to ensure the proper and accurate
calculation of fees. A less frequent collection of information will resut in the inability to assess and collect the fee on a
yearly mandated payment schedule. Therefore, less frequent collection could jeopardize the IRS’s effective oversight
of fees and taxes.

Form 14029 (Rev. 4-2009) Catalog Number 51944B Page 4

Department of the Treasury–Internal Revenue Service

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
Periodic meetings are held between IRS personnel and representatives of various professional groups to discuss tax
law and tax forms. During these meetings, there is an opportunity for those attending to make comments regarding the
collection requirements under this form.
We publised a notice in the Federal Register [75 FR 54232] dated September 3, 2010 regarding this new information
collection. However, no comments were received.

9. EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS
Not applicable.

10. ASSURANCE OF CONFIDENTIALITY OF RESPONSES
Generally, all tax return information is confidential as required by 26 USC 6103.

11. JUSTIFICATION OF SENSITIVE QUESTIONS
Not applicable.

12. ESTIMATED BURDEN OF INFORMATION COLLECTION
The IRS and Treasury Department estimate that there as many as 400 covered entities who are potentially subject to
use this form to submit information. The IRS and Treasury Department further estimate that the average time it will
take each covered entity to complete form 8947 is 9.20 hours, for a total estimated annual burden of 3,680 hours.

Form 14029 (Rev. 4-2009) Catalog Number 51944B

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Department of the Treasury–Internal Revenue Service

13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
Estimates of the annualized cost to respondents are not available at this time.

14. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT
Estimates of the annualized cost to the federal government are not available at this time.

15. REASONS FOR CHANGE IN BURDEN
There is no change in the burden previously approved by OMB. This request is being submitted to renew the
collection.

16. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION
Not applicable

17. REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE
Displaying the expiration date of an OMB control number is inappropriate because it could cause confusion by
leading tax return preparers and the public to believe that the form sunset as of the expiration date. Tax
return preparers and the general public are unlikely to be aware that the IRS intends to request renewal of the
OMB approval and to obtain a new expiration date before the approval expires.

18. EXCEPTIONS TO THE CERTIFICATION STATEMENT ON OMB PRA SUBMISSION FORM
Not applicable.

19. REASON FOR EMERGENCY SUBMISSION

Form 14029 (Rev. 4-2009) Catalog Number 51944B

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Department of the Treasury–Internal Revenue Service