Safe Harbor for Inadvertent Normalization Violations

Forms and Documents

Forms and supporting documents for this ICR

Document	Type	Status	Availability
Normalization Rev Proc OMB submission 11-17 (2).docx	Supplementary Document	Uploaded 2017-03-13	Available
Normal Rev Proc OMB Request Supporting Statement JB redline 3-7-17.docx	Supporting Statement A	Uploaded 2017-03-13	Available

IC Document Collections

Information collection document groups

IC ID	Collection	Type	Status	Form
226048	Rev Proc XXXX-XX / Safe Harbor for Inadvertent Normalization Violations		New

ICR Details

OMB Control No: 1545-2276	ICR Reference No: 201703-1545-007
Status: Historical Active	Previous ICR Reference No:
Agency/Subagency: TREAS/IRS	Agency Tracking No:
Title: Safe Harbor for Inadvertent Normalization Violations
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Emergency	Approval Requested By: 03/31/2017
OIRA Conclusion Action: Approved without change	Conclusion Date: 08/30/2017
	Date Received in OIRA: 03/22/2017
Terms of Clearance:

table that charts list comparision

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	02/28/2018	6 Months From Approved
Responses	150	0	0
Time Burden (Hours)	1,800	0	0
Cost Burden (Dollars)	0	0	0

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Abstract: The proposed revenue procedure provides a safe harbor that allows a utility taxpayer that inadvertently uses a practice or procedure that is inconsistent with the normalization rules (such as failure to use the proration methodology) to correct that practice or procedure at the next available opportunity and be considered not to have violated the normalization rules by their inadvertent error without requiring the taxpayer to obtain a private letter ruling from the Service regarding the inadvertent error.

Emergency Justfication: We initially submitted the proposed revenue procedure for OMB approval through the standard procedure on November 28, 2016, but due to the untimely death of the Service’s OMB Liaison, the package was not processed in a timely manner. As a result, we are now requesting emergency OMB approval to publish the proposed revenue procedure. The timely publication of this document will provide timely and critical relief to utility taxpayers that have inadvertently used an accounting procedure which, if not corrected, could lead to extremely negative tax consequences, as well as avoiding the delay and expense of seeking a private letter ruling from the Service. Branch 6 of the Office of Associate Chief Counsel (PSI) issued several private ruling letters concluding that utility companies using Federal Energy Regulatory Commission (FERC) formula rates are required to use the “proration formula” provided in § 1.167(l)-1(h)(6) of the Income Tax Regulations in calculating the amount of deferred taxes subject to exclusion from rate base. While the conclusion reached in these PLRs is correct and undisputed by industry authorities, it has come as a surprise to many in the utilities industry. We have been informed by utility industry representatives and attorneys familiar with normalization issues that virtually every utility that uses FERC formula rates has calculated their deferred taxes without using the proration formula. Many of these taxpayers either are currently seeking private letter rulings from the IRS or will be forced to incur the cost of seeking such rulings so that their failure to use the proration formula does not result in the imposition of sanctions for a normalization violation. The proposed revenue procedure provides a safe harbor that allows a utility taxpayer that inadvertently uses a practice or procedure that is inconsistent with the normalization rules (such as failure to use the proration methodology) to correct that practice or procedure at the next available opportunity and be considered not to have violated the normalization rules by their inadvertent error without requiring the taxpayer to obtain a private letter ruling from the Service regarding the inadvertent error.

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Authorizing Statute(s): US Code: 26 USC 50(d)(2) Name of Law: Certain rules made applicable
   US Code: 26 USC 168(i)(9) Name of Law: Accelerated cost recovery system; Definitions and special rules ; Normalization rules
  

Citations for New Statutory Requirements: None

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
	Not associated with rulemaking

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Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

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

table that charts list of burden

IC Title	Form No.	Form Name
Rev Proc XXXX-XX / Safe Harbor for Inadvertent Normalization Violations

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ICR Summary of Burden

table that charts list of burden

	Total Approved	Previously Approved	Change Due to New Statute	Change Due to Agency Discretion	Change Due to Adjustment in Estimate	Change Due to Potential Violation of the PRA
Annual Number of Responses	150	0	0	150	0	0
Annual Time Burden (Hours)	1,800	0	0	1,800	0	0
Annual Cost Burden (Dollars)	0	0	0	0	0	0

Burden increases because of Program Change due to Agency Discretion: Yes

Burden Increase Due to: Miscellaneous Actions

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

Burden Reduction Due to:

Short Statement: This is a new information collection request for a new revenue procedure.

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Annual Cost to Federal Government: $0

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

Does this ICR request any personally identifiable information (see OMB Circular No. A-130 for an explanation of this term)? Please consult with your agency's privacy program when making this determination.     No

Does this ICR include a form that requires a Privacy Act Statement (see 5 U.S.C. §552a(e)(3))? Please consult with your agency's privacy program when making this determination.     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: 03/22/2017

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