SUPPORTING STATEMENT
Special Loss Discount Account and Special Estimated Tax Payments for Insurance Companies (Form 8816)
1545-1130
CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Section 847 of the Internal Revenue Code allows insurance companies that are required to discount unpaid losses under Code section 846 an additional deduction for up to the excess of undiscounted unpaid losses less related discounted unpaid losses. The additional deduction may be claimed only if special estimated tax payments covering the amount of the tax benefit generated by the deduction are made.
2. USE OF DATA
This data is used by IRS to ascertain the amount of the additional deduction claimed and the tax benefit derived were properly computed. Also, Form 8816 provides for a reconciliation of the special estimated tax payment account.
3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
We have no plans to offer electronic filing because of low filing volume compared to cost of electronic enabling.
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
There are no small entities affected by this collection.
CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES
The consequences for not collecting this information are that the IRS will not be able to clearly ascertain the amount of the additional deduction claimed and that the tax benefit derived was properly computed. Form 8816 provides for a reconciliation of the special estimated tax payment account. This affects taxpayer confidence and compromises the Agency’s ability to enforce tax compliance effort to the public. Tax compliance is a vital part of the government’s ability to meet its’ mission and serve the public.
7. SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE INCONSISTENT WITH GUIDELINES IN 5 CFR 1320.5(d)(2)
There are no special circumstances requiring data 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
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 8816.
In response to the Federal Register Notice dated May 18, 2016, (81 FR 31307), we received no comments during the comment period regarding Form 8816.
9. EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS
No payment or gift has been provided to any respondents.
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
A privacy impact assessment (PIA) has been conducted for information collected under this request as part of the “Business Master File, BMF” system and a Privacy Act System of Records notice (SORN) has been issued for this system under:
Treas/IRS 24.046 BMF
Treas/IRS 34.047 Audit trail and security records system
The Internal Revenue Service PIA’s can be found at http://www.irs.gov/uac/Privacy-Impact-Assessments-PIA.
Title 26 USC 6109 requires inclusion of identifying numbers in returns, statements, or other documents for securing proper identification of persons required to make such returns, statements, or documents and is the authority for social security numbers (SSNs) in IRS systems.
12. ESTIMATED BURDEN OF INFORMATION COLLECTION
The burden estimate for completing Form 8816 is as follows:
Number of Time per Total
Responses Response Hours
Form 8816 3,000 6.61 19,830
Estimates of the annualized cost to respondents for completing this form and the associated burden estimates are not available at this time.
13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
As suggested by OMB, our Federal Register notice dated May 18, 2016, 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
The primary cost to the government consists of the cost of printing Form 8816. We estimate that the cost of printing the form is $2,000.
REASONS FOR CHANGE IN BURDEN
There is no change in the paperwork burden previously approved by OMB. This form is being submitted for renewal purposes only.
16. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION
There are no plans for tabulation, statistical analysis and publication.
REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE
See attachment.
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.
| File Type | application/msword |
| Last Modified By | Department of Treasury |
| File Modified | 2016-07-08 |
| File Created | 2006-12-22 |