1545-2050_ss_sep2013

SUPPORTING STATEMENT
1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Sections 1231 and 1244 of the Pension Protection Act of 2006 (PPA ’06), enacted on August 17, 2006, added section
4966 to the Internal Revenue Code, and amended sections 4942(g)(4) and 4945(d)(4)(A) to the Code. New Code
section 4966 imposes a new excise tax on a sponsoring organization that maintains donor advised funds for certain
distributions to individuals from the funds, including for disaster relief grants or educational grants. The amendments to
sections 4942 and 4945 impose excise taxes on private foundations that make grants to 501(c)(3) organizations
classified as supporting organizations under certain circumstances. Prior to PPA 06’, although private foundations
were subject to excise taxes on non-qualifying distributions and on taxable expenditures, grants to these certain
supporting organizations were not subject to those requirements.

2. USE OF DATA
Section 3.01 of the Notice provides private foundation with options in collecting information to assist in determining
whether grants to certain supporting organizations are qualifying distributions and are not be taxable expenditures.
Collecting such information will provide private foundations with relief from the new excise taxes imposed under
amended sections 4942 and 4945 of th Sections 5.01 and 5.02 of the Notice provides relief from excise taxes imposed
under new section 4966 of the Code. A sponsoring organization of certain donor advised funds will not be subject to
the new taxes for distributions from employer-sponsored disaster relief funds or for distributions of certain educational
grants if the organization collects and maintains the required documentation. The Notice clarifies that existing
documentation requirements for employer-sponsored relief programs and educational grants apply to these funds.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
IRS Publications, Regulations, Notices, and Letters are to be electronically enabled on an as 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.

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
This notice was published in the Internal Revenue Bulletin on December 18, 2006 (Notice 2006-109, 2006-51 I.R.B.
1121).
We received no comments during the comment period in response to the Federal Register notice dated April 3, 2013
(78 FR 20175).

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
We estimate that there are 80,000 private foundations, and that 64,000 private foundations will avail themselves of the
relief provided in Section 3.01 of the Notice, with an estimated average of 9 hours, 48 minutes for each foundation.
The total estimated burden for 64,000 private foundations is 606,270 hours annually.
We estimate that there are 1,000 sponsoring organizations of donor advised funds and that 800 of them will avail
themselves of the relief provided in Section 5 of the Notice, with an estimated average of 7 hours, 53 minutes for each
organization. The total estimated burden for 800 organizations is 6,024 hours annually.

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
As suggested by OMB, our Federal Register notice dated April 3, 2013 (78 FR 20175) 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
Not applicable.

15. REASONS FOR CHANGE IN BURDEN
There is no change in 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.

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 regulation sunsets 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 PRA SUBMISSION FORM
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.

19. REASON FOR EMERGENCY SUBMISSION
Not applicable.

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

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Department of the Treasury–Internal Revenue Service