TD 8594 - Supporting Statement2013[1]

SUPPORTING STATEMENT

OMB Number 1545-1447

TD 8594, Losses on Small Business Stock

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

This regulation relates to losses on small business stock under Code section 1244. The regulation requires that a person who claims an ordinary loss with respect to stock under section 1244 must have records sufficient to establish that the taxpayer is entitled to the loss and satisfies the requirements of section 1244. The purpose of this recordkeeping requirement is to ensure that the taxpayer has such records as are necessary to allow the Service examiner to determine whether the taxpayer is entitled to a section 1244 loss.

2. USE OF DATA

Paragraph (b) of §1.1244(e)‑1 requires a taxpayer claiming an ordinary loss with respect to stock under section 1244 to have records sufficient to establish that the taxpayer is entitled to the loss and satisfies the requirements of section 1244. The recordkeeping requirement is necessary to enable the Service examiner to determine whether the taxpayer is entitled to the loss. The records will be used by Service examiners to verify that the stock qualifies as section 1244 stock. If such recordkeeping were not required, then taxpayers might not have records sufficient to prove that they are entitled to section 1244 ordinary loss treatment, and their losses would therefore be denied.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

IRS publication, 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.

3. EFFORTS TO IDENTIFY DUPLICATION

We have attempted to eliminate duplication within the agency wherever possible.

3. METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES

This collection of information will not have a significant impact on a substantial number of small businesses or other small entities.

6. CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES

Consequences of less frequent collection on federal programs or policy activities, could result in taxpayers might not have records sufficient to prove that they are entitled to section 1244 ordinary loss treatment, and their losses would therefore be denied.

7. SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE INCONSISTENT WITH GUIDELINES IN 5 CFR 1320.5(d)(2)

There are no special circumstances requiring date collection to be inconsistent with Guidelines in 5 CFR 1320.5(d)(2).

8. CONSULTATION WITH INDIVIDUALS OUTSIDE OF THE AGENCY ON AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS

The notice of proposed rulemaking was published in the Federal Register on November 15, 1994 (59 FR 58800). No public hearing was requested or held. The final regulation was published in the Federal Register on April 28, 1995 (60 FR 20898).

We received no comments during the comment period in response to the Federal Register notice dated April 01, 2016 (81 FR 18943).

8. EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS

No payment or gift has been provided to any respondents.

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

No personally identifiable information (PII) is collected.

12. ESTIMATED BURDEN OF INFORMATION COLLECTION

Paragraph (b) of §1.1244(e)‑1 requires that the taxpayer have records sufficient to establish that the taxpayer is entitled to the loss and satisfies the requirements of section 1244. We estimate that 10,000 individuals and corporations will have the records specified in §1.1244(e)‑l(b) of the regulation, with an estimated annual burden per recordkeeper of .20 hour, with an estimated total annual recordkeeping burden of 2,000 hours.

T.D.	Individuals and Corporations/ Responses	Time/per response	Total Annual Burden hours
T. D 8594	10,000	.20 hrs.	2000 hrs.

13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

There are no capital/start-up or ongoing operation/ maintenance cost associated with this information collection.

13. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

There is no estimated annualized cost to the federal government.

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

There are no plans for tabulation, statistical analysis and publication.

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

There are no exceptions to the certification statement.

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.