SUPPORTING STATEMENT
U.S. Income Tax Return for Estates and Trusts
Form 1041 and Schedules
OMB Control Number 1545-0092
CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Form 1041, U.S. Income Tax Return for Estates and Trusts, is used by the fiduciary of a domestic decedent’s estate, trust, or bankruptcy estate to report (26 USC 6012 (b)):
* Income, deductions, gains, losses, etc. of the estate or trust;
* Income that is either accumulated or held for future distribution or distributed
currently to the beneficiaries;
* Income tax liability of the estate or trust; and
* Employment tax on wages paid to household employees.
The following code sections impose additional burden:
26 USC 55(a) imposes an alternative minimum tax.
26 USC 59(c) requires estates and trusts to compute their alternative minimum taxable income by applying Part I of Subchapter J with the adjustments provided in Part IV of Subchapter A.
26 USC 641 imposes an income tax on the taxable income of the decedent's estate or trust that is not distributed during the tax year that it is received.
26 USC 652 requires the beneficiaries of a simple trust to include in their gross income the amount of the income required to be distributed currently.
26 USC 662 requires beneficiaries of estates and trusts to include in their income the sum of: (1) the income required to be distributed currently; and (2) all other amounts properly paid, credited, or required to be distributed.
26 USC 643(g) allows a trustee to make an election to treat any payment of estimated tax paid by the trust, or by an estate in the final year, as a payment made by the beneficiary.
26 USC 666 requires a beneficiary of a complex trust to include in income an accumulation distribution from the complex trust.
26 USC 671‑677 and 26 USC 679 treat grantors as owners of the trust when the grantor retains certain powers over the trust. The grantors are required to include in their income all or part of the income that otherwise would be taxable to the trust.
26 USC 6654(1) requires estates, with certain exceptions, and trusts to make estimated tax payments.
The following forms and worksheets were developed to assist taxpayers in the reporting of this information:
The fiduciary of a domestic decedent's estate, trust, or bankruptcy estate uses Form 1041 to report: income, deductions, gains, losses, etc. of the estate or trust; the income that is either accumulated or held for future distribution or distributed currently to the beneficiaries; any income tax liability of the estate or trust; and employment taxes on wages paid to household employees.
Schedule D is used for reporting details of gain or loss from sales or exchanges of capital assets and to assist in the computation of alternative tax for certain cases in which Schedule D (Form 1041) was completed. This form is filed with Form 1041.
Schedule D Tax Workshee,t if applicable, is used to figure the estate's or trust's tax if the estate or trust files Schedule D (Form 1041) and has: A net capital gain and any taxable
income, or Qualified dividends on line 2b(2) of Form 1041 and any taxable income.
Schedule G, Tax Computation, is used to figure the tax using the Tax Rate Schedule in the instructions. The tax amount is entered on line 1a.
Schedule I (Form 1041) is used to compute the DNI and income distribution deduction on a minimum tax basis.
Schedule J (Form 1041) is used to report an accumulation distribution for a domestic complex trust that was: Previously treated at any time as a foreign trust (unless an exception is provided in future regulations), or Created before March 1, 1984, unless that trust would not be aggregated with other trusts under the rules of section 643(f) if that section applied to the trust.
The fiduciary (or one of the joint fiduciaries) must file Schedule K-1. A copy of each beneficiary's Schedule K-1 is attached to the Form 1041 filed with the IRS, and each beneficiary is given a copy of his or her respective Schedule K-1. One copy of each Schedule K-1 must be retained for the fiduciary's records.
The Qualified Dividends Tax Worksheet is used if the taxpayer does not have to complete Part I or Part II of Schedule D and the estate or trust has an amount entered on line 2b(2) of Form 1041 and any taxable income (line 22), then figure the estate's or trust's tax using the worksheet and entering the tax on line 1a.
Qualified Mortgage Insurance Premiums Deduction Worksheet: the estate or trust cannot deduct mortgage insurance premiums if the estate's or trust's AGI is more than $109,000. If the estate's or trust's AGI is more than $100,000, its deduction is limited and the worksheet must be used to figure the deduction.
Unused Capital Loss Carryover Upon termination of the trust or decedent's estate, the beneficiary succeeding to the property is allowed as a deduction any unused capital loss carryover under section 1212. If the estate or trust incurs capital losses in the final year, the Capital Loss Carryover Worksheet is used in the Instructions for Schedule D (Form 1041) to figure the amount of capital loss carryover to be allocated to the beneficiary
.
Form 1041-V is a statement used to send a check or money order for any balance due.
USE OF DATA
Form 1041, Schedule A of Form 1041, Schedule B of Form 1041, Schedule D (Form 1041), and Schedule G (Form 1041) are used by IRS to verify that the income tax reported is correct. Schedule I of Form 1041 is used by the IRS to verify the correctness of adjustments and items of tax preference in computing the fiduciary's alternative minimum tax; and the amount of distributable net income computed on a minimum tax basis that is distributed to the beneficiaries. Schedule J (Form 1041) and Schedule K‑1 (Form 1041) are used by IRS to verify that the beneficiaries included the correct amounts on their returns. The 1041-V allows the IRS to process the payment more accurately and efficiently.
3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
We are currently offering electronic filing on Form 1041.
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 businesses or other small entities affected by this collection.
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 decrease in the 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).
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 1041.
In response to the Federal Register notice dated October 13, 2016 (81 FR 70742), we received no comments during the comment period regarding Form 1041.
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.
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)” and a Privacy Act System of Records notice (SORN) has been issued for these systems under IRS 22.062 – Electronic Filing Records; IRS 24.030 – Customer Account Data Engine (CADE) Individual Master File; IRS 24.046 - CADE Business Master File (BMF); IRS 34.037 - IRS Audit Trail and Security Records System. The Internal Revenue Service PIA’s can be found at https://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 is as follows:
Number of Time per Total
Form Responses Response Hours
1041 3,017,000 74.77* 225,581,090
1041 QMI WK 123 1.94 239
1041 EX L-20 WK 820 1.70 1,394
Schedule G L-1a 24,600 4.37 107,502
Schedule D 1,148,000 23.48 26,955,040
Schedule D L-15d WK 164,000 4.78 783,920
Schedule D L-15e WK 30,750 1.90 58,425
Schedule D CAP LOSS 135,300 3.40 460,020
Schedule D Tax WK 71,750 8.75 627,813
Schedule I 1,119,300 26.92 30,131,556
Schedule J 820 15.34 12,579
Schedule K-1 2,896,240 7.76 22,474,822
1041-V 820,000 .72 590,400
Total Number of Responses Total Number of Hours
9,428,703 307,784,800
Note* The agency recognizes that the instructions for Form 1041 show different times. The times reflected above are correct. The instructions will be updated during the next print cycle (2017).
The following regulations impose no additional burden. Please continue to assign OMB number 1545‑0092 to these regulations.
l.642(c)‑2 1.642(g)-1
1.642(I)‑1(c) 1.663(b)-2(a)
1.47‑5(a) 1.671-4(a)
1.642(I)‑1(d) 1.671-4(b)(2)(iv)
1.666(d)‑1A(a) 1.6012-3(a)
1.641(b)‑2(a) 1.6012-3(b)
1.642(c)‑1(b)(3)(4) 1.6012-3(c)
1.642(c)‑6(c)(4) 20.2055-2(h)
301.7207‑1
13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
There is no known annual cost burden to respondents.
ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT
After consultation with various functions within the Service, we have determined that the cost of developing, printing, processing, distribution and overhead for the form is $5,710,689.
15. REASONS FOR CHANGE IN BURDEN
The agency has updated the number of responses based on the most data obtained published in Publication 6292. The program change/adjustments in times to complete the forms was the result of a slight error in calculation and Schedule D-1 (Continuation Sheet) being made obsolete in 2014 (agency discretion). There have been no substantial changes to the forms that would affect burden.
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
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 |
| Author | TQ1FB |
| Last Modified By | Department of Treasury |
| File Modified | 2016-12-15 |
| File Created | 2016-12-15 |