SUPPORTING STATEMENT
Internal Revenue Service
Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction
OMB #1545-2078
1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
The Tax Increase Prevention and Reconciliation Act of 2005, Public Law 109–222 (120 Stat. 345) (TIPRA), enacted on May 17, 2006, defines certain transactions as prohibited tax shelter transactions and imposes excise taxes and disclosure requirements with respect to prohibited tax shelter transactions to which a tax-exempt entity is a party. Section 516 of TIPRA added new section 4965 and amended sections 6033(a)(2) and 6011(g) of the Code.
TD 9492, published July 6, 2010 (75 FR 3870), approved under 1545-2079, contains final regulations that provide guidance under section 4965 of the Internal Revenue Code (Code), relating to entity-level and manager-level excise taxes with respect to prohibited tax shelter transactions to which tax-exempt entities are parties; sections 6033(a)(2) and 6011(g), relating to certain disclosure obligations with respect to such transactions; and sections 6011 and 6071, relating to the requirement of a return and time for filing with respect to section 4965 taxes.
Form 8886-T, Disclosure by Tax-Exempt Entity Regarding Prohibited Tax Shelter Transaction, was developed to carry out the provisions which require certain tax-exempt entities to file Form 8886-T to disclose information for each prohibited tax shelter transaction to which the entity was a party.
2. USE OF DATA
The information collected on Form 8886-T will provide eligible tax-exempt entities a standardized format to disclose the information regarding the tax shelter transactions to which they were a party.
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. There are no current plans to offer electronic filing of Form 8886-T because of the evaluative nature of the determination.
4. EFFORTS TO IDENTIFY DUPLICATION
The information obtained through this collection is unique and is not already available for use or adaptation from another source.
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
Form 8886-T will provide eligible tax-exempt entities a standardized format to disclose the information.
A less frequent collection would lead to failure to collect the information and inconsistent methods of recording and reporting information. This will complicate efforts to report and collect proper tax amounts annually thereby hindering the IRS from meeting its mission.
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 8886-T.
In response to the Federal Register notice dated March 7, 2017 (82 FR 12909), we received no comments during the comment period regarding Form 8886-T.
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 tax return information are confidential as required by 26 USC 6103.
11. JUSTIFICATION OF SENSITIVE QUESTIONS
No personally identifiable information (PII) is being collected.
12. ESTIMATED BURDEN OF INFORMATION COLLECTION
The burden estimate is as follows:
Authority |
Description |
# of Respondents |
# Responses per Respondent |
Annual Responses |
Hours per Response |
Total Burden |
Treasury Regulation 1.6033-5 |
Form 8886-T |
6,500 |
1 |
6,500 |
10.83 |
70,395 |
Totals |
|
|
|
6,500 |
|
70,395 |
The following regulations impose no additional burden. Please continue to assign OMB number 1545-2078 to these regulations.
1.6033-5
13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
As suggested by OMB, our Federal Register Notice dated March 7, 2017, 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, IRS estimates the cost burdens to be nominal.
14. 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 $13,873.
15. REASONS FOR CHANGE IN BURDEN
There are no changes in paperwork burden previously reported to 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 form 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.
| File Type | application/msword |
| File Modified | 2017-06-13 |
| File Created | 2017-06-13 |