Supporting Statement 1545-1580

SUPPORTING STATEMENT

OMB# 1545-1580

Compensation Deferred Under Eligible Deferred Compensation Plans

(T.D. 9075)

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Provisions enacted in section 1448 of the Small Business Job Protection Act of 1996 ("SBJPA") (Pub. L. 102-318) require state and local governments, effective on or before January 1, 1999, to hold all assets and income of eligible section 457 deferred compensation plans in trust, or in custodial accounts or annuity contracts described in section 401(f) of the Internal Revenue Code for the exclusive benefit of their participants and beneficiaries. The requirement to establish written trusts, custodial accounts or annuity contracts is intended to ensure compliance with the SBJPA's trust requirement. The requirement that certain new non-bank custodians submit applications to be approved to serve as custodians of section 457 accounts is intended to ensure that section 457 plan assets held in custodial accounts are safeguarded for the exclusive benefit of their participants and beneficiaries.

2. USE OF DATA

The data will be used by the Service to determine whether the state or local government sponsoring the eligible deferred compensation plan has complied with the statutory requirement to hold its assets and income in trust for the exclusive benefit of its participants and beneficiaries.

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

There are no small entities affected by this collection.

6. CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL

PROGRAMS OR POLICY ACTIVITIES

Consequences of less frequent collection on federal programs or policy activities could consist of a decreased amount of taxes collected by the Service, inaccurate and untimely filing of tax returns, and an increase in tax violations.

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

Notice 98-8 was published in the Internal Revenue Bulletin on January 26, 1998 (1998-4 IRB 6). The regulation replaced the notice.

The notice of proposed rulemaking was published in the Federal Register on May 8, 2002 (67 FR 30826). A public hearing was held on August 28, 2003. The final regulations were published in the Federal Register on July 11, 2003 (68 FR 41230).

We received no comments during the comment period in response to the Federal Register notice dated July 27, 2016 (81 FR 49358).

9. 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 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 IRS 24.046-Customer Account Data Engine Business Master File. The Internal Revenue Service PIAs 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

Section 1.457-8 requires State and local governments to establish a written trust, custodial account, or annuity contract to hold the assets and income of their section 457 plans for the exclusive benefit of their participants and beneficiaries. The burden of the collection of information required by §1.457-8 is estimated to be a one-time 10,250 hours with a one-time estimated average burden to each respondent of 1 hour. The estimated number of respondents is 10,250.

Section 1.457-8 requires certain non-bank custodians who had not previously been approved by the Internal Revenue Service to serve as custodians of certain custodial accounts to submit a written application to the Service pursuant to established procedures for such approval. The collection of information required by Section 457-8 is estimated to be a one-time 350 hours with a one-time estimated average burden to each respondent of 35 hours. The estimated number of respondents is 10.

Time per Total

Respondents response burden

Trust/Custodial

Acct/Annuity 10,250 1 Hour 10,250

Contract

Application 10 35 Hours 350

10,260 10,600

13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

There is no start-up cost associated with this collection.

14. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

There is no estimated 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.