Supporting Statement
Rev. Proc. 2008-27, 9100 Relief Under Sections 897 and 1445.
1. Circumstances Necessitating Collection of Information
As a means of assuring payment of taxes under section 897, section 1445(a) requires the transferee of a U.S. real property interest to withhold 10 percent of the amount realized by the foreign person on the disposition of the U.S. real property interest. Other provisions of section 1445 require withholding on certain distributions by certain entities.
Exceptions exist to withholding. For instance, withholding is generally not required if, due to the operation of a nonrecognition provision of the Internal Revenue Code, the transferor is not require to recognize gain or loss with respect to the transfer. An exception to withholding also exists if a foreign person transfers an interest in a domestic corporation which is not a U.S. real property interest. In order to qualify for these exceptions, parties to the transaction must provide statements or notices to the IRS within a certain time frame.
When these persons do not submit the statements/notices to the IRS in a timely manner, they may request relief under section 301.9100. This Revenue Procedure provides an alternative, simplified method of requesting relief for certain untimely filings under section 897 and 1445. Under the Revenue Procedure, taxpayers may send the aforementioned statements and notices together with a statement explaining why the taxpayer’s failure to timely file the statement or notice was due to reasonable cause.
2. Use of Data
The collection of information relates to the requirement that certain persons must submit a statement explaining why their failure to timely file a statement or notice was due to reasonable cause. This collection of information is necessary for IRS personnel to determine if relief should be grated for a taxpayer to correct the untimely filing.
3. Use of Improved Information Technology to Reduce Burden
IRS Publications, Regulations, Notices and Letters are to be electronically enabled on a 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
Not applicable.
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.
Consultation with Individuals Outside of the Agency on Availability of Data, Frequency of Collection, Clarity of Instructions and Forms, and Data Elements
Revenue Procedure 2008-27 was published in the Internal Revenue Bulletin on May 27, 2008 (2008-21 IRB 1014).
We received no comments during the comment period in response to the Federal Register notice dated November 15, 2010 (75 FR 69741).
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 collection of information in this Revenue Procedure is in section 4.02. The collection of information relates to the taxpayer’s demonstration that it had reasonable cause for the failure to file certain notices or statements necessary to meet the exceptions to withholding. This collection of information is necessary because it provides the IRS with the required information to conclude that a taxpayer had, or did not have, reasonable cause for its failure to timely file the applicable statements or notices.
A statement demonstrating reasonable cause must be attached by the taxpayer to the statements or notices otherwise required to be filed. We estimate that on an annual basis approximately 250 taxpayers will utilize the procedures in this Revenue Procedure. We estimate that it will take approximately four hours to prepare the statement demonstrating reasonable cause.
# Respondents |
# Responses Per Respondent |
# Annual Responses |
Hours Per Response |
Total Burden |
250 |
1 |
250 |
4 |
1,000 |
Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time.
13. Estimated Total Annual Cost Burden to Respondents
As suggested by OMB, our Federal Register notice dated November 15, 2010, requested public comments on estimates of cost 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
An increase in the total burden is due to an error in the reporting of the time/burden per response from 0.02 of an hour to 4 hours per response. This revision is a program change due to an adjustment in estimate.
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 cause confusion by leading taxpayers to believe that the regulations sunset 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 USC 6103.
| File Type | application/msword |
| File Title | Supporting Statement |
| Author | LocalUser |
| Last Modified By | Reference |
| File Modified | 2011-04-25 |
| File Created | 2011-04-25 |