SUPPORTING STATEMENT
(IRS Form 3520-A)
1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Section 6048 requires that foreign trusts that have at least one U.S. beneficiary file an annual information return. The contents of the return are set forth in regulation section 404.6048‑1. This regulation requires that the information be submitted on Form 3520‑A.
2. USE OF DATA
The grantor trust rules apply to the U.S. person who establishes or transfers property to the trust. The IRS uses Form 3520‑A to determine the tax liability of the U.S. person who established the trust or who transferred property to the trust. The form provides information about the foreign trust to its U.S. owners and beneficiaries.
3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
Low filing volume does not justify the cost of electronic enabling.
4. EFFORTS TO IDENTIFY DUPLICATION
We have attempted to eliminate duplication within the agency wherever possible.
METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES
Not applicable.
CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES
Not applicable.
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 the American Bar Association, the National Society of Public Accountants, the American Institute of Certified Public Accountants, and other professional groups to discuss tax law and tax forms. During these meetings, there is an opportunity for those attending to make comments regarding Form 3520-A.
In response to the Federal Register notice dated October 19, 2012 (77 FR 64378), we received no comments during the comment period regarding Form 3520-A.
In accordance with the terms of clearance pursuant to the 2009 OMB approval, we received a suggestion recommending incorporating a de minimis threshold to Form 3520-A. The comment letter was forwarded to the Tax Forms Division for consideration. The suggestion(s) and/or comments made in the original 2009 comment letter where taken into account when the form was revised for the later tax year(s). In reading the comments for OMB # 1535-0160, we have determined that the commenter is rendering an opinion and suggesting a change to IRC 6048 and the requirements for filing Form 3520-A.
Therefore, no changes were made to the form. No official reply was issued in response to the original comment letter submitted in 2009.
EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS
Not applicable.
ASSURANCE OF CONFIDENTIALITY OF RESPONSES
Generally, tax returns and tax return information are confidential as required by 26 USC 6103.
JUSTIFICATION OF SENSITIVE QUESTIONS
Not applicable.
ESTIMATED BURDEN OF INFORMATION COLLECTION
The burden estimate is as follows:
Number of Time per Total
Responses Response Hours
Form 3520-A 500 43.40 21,700
Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time.
The following regulation imposes no additional burden. Please continue to assign OMB number 1545-0160 to this regulation.
404.6048-1
ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
As suggested by OMB, our Federal Register notice dated October 19, 2012, 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
After consultation with various functions within the Service, we have determined that the cost of developing, printing, processing, distribution, and overhead for Form 3520-A is $9,400.
15. REASONS FOR CHANGE IN BURDEN
There is no change in the paperwork burden previously approved by OMB. We are making this submission to renew the OMB approval.
16. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION
Not applicable.
REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE
See attachment.
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.
| File Type | application/msword |
| Author | XHFNB |
| Last Modified By | R. Joseph Durbala |
| File Modified | 2013-07-02 |
| File Created | 2013-04-23 |