Treatment of certain interests between members of an expanded group as indebtedness

Forms and Documents

Document Name	Status
SUPPORTI.DOC Supporting Statement A	2016-04-08

IC Document Collections

IC ID	Document Title	Status
220716	?1.385-2 Treatment of certain interests between members of an expanded group as indebtedness.	New

ICR Details

OMB Control No: 1545-2267	ICR Reference No: 201603-1545-010
Status: Historical Inactive	Previous ICR Reference No:
Agency/Subagency: TREAS/IRS	Agency Tracking No: Ready
Title: Treatment of certain interests between members of an expanded group as indebtedness
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Comment filed on proposed rule	Conclusion Date: 06/03/2016
	Date Received in OIRA: 04/08/2016
Terms of Clearance: Pursuant to 5 CFR 1320.11(c), OMB files this comment on this information collection request (ICR. The agency shall examine public comment in response to the NPRM and will describe in the supporting statement of its next collection any public comments received regarding the collection as well as why (or why it did not) incorporate the commenter’s recommendation. The next submission to OMB must include the draft final rule.

	Inventory as of this Action	Requested	Previously Approved
Expiration Date		36 Months From Approved
Responses	0	0	0
Time Burden (Hours)	0	0	0
Cost Burden (Dollars)	0	0	0

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Abstract: Section 385(a) authorizes the Secretary to prescribe such regulations as may be necessary or appropriate to determine whether an interest in a corporation is to be treated as stock or indebtedness for federal tax purposes in particular situations. Related party transactions may not be subject to, and frequently do not adhere to, standard commercial practices of third-party transactions. As a result, the documentation and information necessary to determine the treatment of an EGI as stock or indebtedness for federal tax purposes is often incomplete or unavailable. Section 1.385-2 prescribes the documentation and information that must be prepared, maintained, and provided by persons claiming that an EGI is indebtedness for federal tax purposes. Satisfying the requirements of this section does not establish that an interest is indebtedness; such satisfaction serves as a minimum standard that enables this determination to be made under general federal tax principles.

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Authorizing Statute(s): US Code: 26 USC 385 Name of Law: Treatment of certain interests in corporations as stock or indebtedness.
  

Citations for New Statutory Requirements: US Code: 26 USC 385 Name of Law: Treatment of certain interests in corporations as stock or indebtedness.

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
1545-BN40	Proposed rulemaking	81 FR 20912	04/08/2016

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Federal Register Notices & Comments
60-day Notice:	Federal Register Citation:	Citation Date:
	81 FR 20912	04/08/2016
Did the Agency receive public comments on this ICR? No

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Number of Information Collection (IC) in this ICR: 1

IC Title	Form No.	Form Name
§1.385-2 Treatment of certain interests between members of an expanded group as indebtedness.

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Burden increases because of Program Change due to Agency Discretion: No

Burden Increase Due to:

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: Section 1.385-2 prescribes the documentation and information that must be prepared, maintained, and provided by persons claiming that an EGI is indebtedness for federal tax purposes. Satisfying the requirements of this section does not establish that an interest is indebtedness; such satisfaction serves as a minimum standard that enables this determination to be made under general federal tax principles. We estimate that there are 21,000 taxpayers per year that will need to determine whether the EGI is appropriately treated as stock or indebtedness for federal tax purposes as described in the proposed regulation. We estimate that it will take an average of 35 hours (between 30 and 40 hours) per taxpayer each year to comply. The total burden estimated per year is 735,000 hours

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Annual Cost to Federal Government: $0

Does this IC contain surveys, censuses, or employ statistical methods? No

Is the Supporting Statement intended to be a Privacy Impact Assessment required by the E-Government Act of 2002? No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? No

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? Uncollected

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Common Form ICR:  No

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On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).

The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(i) Why the information is being collected;

(ii) Use of information;

(iii) Burden estimate;

(iv) Nature of response (voluntary, required for a benefit, or mandatory);

(v) Nature and extent of confidentiality; and

(vi) Need to display currently valid OMB control number;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.

Certification Date: 04/08/2016

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