1513-0009 Ss (01-31-2013)

OMB Control Number 1513-0009 - Supporting Statement, page 5

DEPARTMENT OF THE TREASURY

ALCOHOL AND TOBACCO TAX AND TRADE BUREAU

Supporting Statement – Information Collection Requirement

OMB Control Number 1513-0009

TTB F 5120.25 Application to Establish and Operate Wine Premises

TTB F 5120.36 Wine Bond

A. Justification.

1. What are the circumstances that make this collection of information necessary and what legal or administrative requirements necessitate the collection? Also include the following: Align the information collection to Treasury’s Strategic Goals, Line of Business/Sub-function, and IT Investment, if one is used.

Title 26 U.S.C. 5351 – 5373 provide for the establishment and operation of bonded wineries and taxpaid wine bottling houses. These sections of law specifically provide for filing applications and bonds, withdrawal and use of wine spirits from distilled spirits plants, and removal of wine upon payment of tax, free of tax, and without payment of tax. 26 U.S.C. 5351 requires that persons establishing a place for the production, blending, cellar treatment, storage, bottling, packaging, or repackaging of untaxpaid wine, including the use of untaxpaid wine spirits in wine production must, before starting operations, make an application and file a bond with the Secretary of Treasury and then receive permission to operate. These operations are known as bonded wine cellars except for those operations engaged in production which are known as bonded wineries. TTB F 5120.25 and TTB F 5120.36 and supporting data are prescribed in regulations 27 CFR:

24.100 24.113 24.128 24.152

24.101 24.114 24.129 24.153

24.102 24.115 24.130 24.154

24.103 24.116 24.131 24.155

24.105 24.117 24.135 24.156

24.106 24.120 24.136 24.157

24.107 24.122 24.137 24.158

24.108 24.123 24.140 24.159

24.109 24.124 24.145 24.166

24.110 24.125 24.146 24.167

24.111 24.126 24.147 24.291

24.112 24.127 24.150 70.281

TTB F 5120.25 is used to establish the qualifications of an applicant for a bonded wine cellar, bonded winery, taxpaid wine bottling house, or by a current proprietor whose status has changed and must change the information already on file. The applicant certifies his/her intention to produce and/or store a specified amount of wine and takes certain precautions to protect it from unauthorized use. The applicant registers, when applicable, any names, other than the applicant’s own, which are to be used in packaging the wine. The completed application and supporting data is a permanent record of the business and its qualifications to operate.

TTB 5120.36 is a wine bond form used by the proprietor and a surety company as a contract to ensure tax payment. For this submission, we are proposing language in the instructions, intended to alleviate the need for the TTB National Revenue Center’s (NRC) delinquent tax specialists to obtain consents of surety every time that an installment agreement is accepted for payment of tax.

This information collection is aligned with:

Treasury Strategic Goal: Effectively Manage U.S. Government Finances.

Line of Business/Sub-function: General Government/Taxation Management.

IT Investment: Tax Major Application Systems.

2. How, by whom and for what purpose is this information used?

We collect and use the information on TTB F 5120.25 and TTB 5120.36 to calculate the size of the bond required and to determine if the proposed plant will provide adequate protection for the revenue. The forms clearly identify the information and use of standardized forms, provide an efficient method of collecting the required information for the excise tax on wine, and provide a statutory system of controls for securing payment of taxes properly due.

3. To what extent does this collection of information involve the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology? What consideration is given to use information technology to reduce burden?

We have approved and will continue to approve, on a case-­by‑case basis, the use of improved information technology. These forms can be submitted electronically in our Permit Online (PONL) system or downloaded and submitted manually from TTB.gov.

4. What efforts are used to identify duplication? Why can’t any similar information

already available be used or modified for use for the purposes described in Item 2 above?

The forms contain information collected that is pertinent to each respondent and

applicable to the specific issue of filing an application and a bond for the protection of

Federal taxes. As far as we can determine, similar information is not available

elsewhere.

5. If this collection of information impacts small businesses or other small entities,

what methods are used to minimize burden?

In this collection of information, TTB collects what it believes to be the minimum amount of information necessary to ensure collection of excise taxes on wine. The standards cannot be reduced on the basis of the size of respondent.

6. What consequences to Federal program or policy activities and what, if any, technical or legal obstacles to reducing burden will occur if this collection is not conducted or is conducted less frequently?

These forms cannot be readily eliminated because they implement a statutory requirement and have a volume of information of limited usage. Elimination or less frequent collection of this information would pose jeopardy to the revenue.

7. Are there any special circumstances associated with this information collection that would require it to be conducted in a manner inconsistent with OMB guidelines?

There are no special circumstances associated with this information collection.

8. What effort was made to notify the general public about this collection of information? Summarize the public comments that were received and describe the action taken by the agency in response to those comments.

A 60-day notice was published in the Federal Register (74 FR 26920) on Friday, November 9, 2012. The notice solicited comments from the general public. TTB received no comments in response to this notice.

9. What decision was made to provide any payment or gift to respondents, other than remuneration of contractors or grantees?

No payment or gift is associated with this collection.

10. What assurance of confidentiality was provided to respondents and what was the basis for the assurance in statute, regulations, or agency policy?

When we receive these forms they are maintained at our National Revenue Center in secure file rooms with controlled public access. Moreover, 26 U.S.C. 6103 protects the confidentiality of proprietary information obtained by the Government from regulated individuals.

11. What justification is there for questions of a sensitive nature?

We do not ask questions of a sensitive nature in this collection.

12. What is the estimated hour burden of this collection of information?

There is a change in the burden hours for this submission. The number of respondents for TTB F 5120.25 has changed to 2,500 and TTB F 5120.36 to 1,400 (3,900 total respondents).

Paper: (TTB F 5120.25) 1,500 (respondents) X 1 (times filed annually) = 1,500 (responses) X 15 minutes = (375) and

(TTB F 5120.36) 400 (respondents) X 1 (times filed annually) = 400 (responses) X 1 hour (processing time) = 400 (burden hours). = 775 (Total Burden Hours).

PONL: (TTB F 5120.25) 1,000 (respondents) X 1 (times filed annually) = 1,000 (responses) X

15 minutes (processing time) = 250 (burden hours) and

(TTB F 5120.36) 1,000 (respondents) X 1 (times filed annually) = 1,000 X 45 minutes

processing time) = 750 (burden hours) = 1,000 (total burden hours).

Total Burden Hours: 775 + 1,000 = 1,775

	No. of Respondents	No. Responses Per Respondent	Annual Responses	Hours Per Response	Total Burden
PAPER – TTB F 5120.25	1,500	1	1,500	.25	375
PAPER – TTB F 5120.36	400	1	400	1	400
Totals	1,900	1	1,900	1.25	775

	No. of Respondents	No. Responses Per Respondent	Annual Responses	Hours Per Response	Total Burden
PONL – TTB F 5120.25	1,000	1	1,000	.25	250
PONL – TTB F 5120.36	1,000	1	1,000	.75	750
Totals	2,000	1	2,000	1	1,000

Total Burden Hours: 775 + 1,000 = 1,775

13. What is the estimated total annual cost burden to respondents or recordkeepers

resulting from this collection of information (excluding the value of the burden hours in

Question 12 above?

We do not associate any cost with this information collection.

14. What is the annualized cost to the Federal Government?

Estimates of annual cost to the Federal Government are as follows:

Printing and Distribution $ 150

Clerical Costs 300

Other Salary (review 1,000

supervisory, etc.)

TOTAL $1,454

Printing and Distribution has decreased with the availability of these forms through PONL and TTB.gov. There are few occasions for us to print and distribute these forms, however, with the increase in submission, other cost has increased slightly but the total cost is still less than before, because of PONL.

15. What is the reason for any program changes or adjustments reported?

There is an adjustment associated with this collection. The number of respondents has increased compared to what was submitted in the last Supporting Statement. Also, the number of respondents using PONL has increased and as a result the burden hours have decreased because of the ease of electronic submission.

16. Outline plans for tabulation and publication for collections of information whose results will be published.

The results of this collection will not be published.

17. If seeking approval to not display the expiration date for OMB approval of this information collection, what are the reasons that the display would be inappropriate?

We will display the expiration date of OMB approval for these collections.

18. What are the exceptions to the certification statement?

(c) See item 5 above.

(f) This is not a recordkeeping requirement.

(i) No statistics are involved.

B. Collection of Information Employing Statistical Methods

This collection does not employ statistical methods.