Form 8976 Supporting Statement_1545-2268

4

Supporting Statement

Internal Revenue Service

(Form 8976, Notice of Intent to Operate Under Section 501(c)(4))

OMB 1545-2268

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

The Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) added new section 506 to the Internal Revenue Code (Code). Section 506 requires an organization described in section 501(c)(4), no later than 60 days after the organization is established, to notify the Secretary that it is operating as a section 501(c)(4) organization (the notification). Section 506(b) provides that the notification must include: (1) the name, address, and taxpayer identification number of the organization; (2) the date on which, and the State under the laws of which, the organization was organized; and (3) a statement of the purpose of the organization.

This submission covers the Form 8976, Notice of Intent to Operate Under Section 501(c)(4), which will be used by organizations to submit the section 506 notification.

2. USE OF DATA

This information will be used by IRS to process the notification for completeness in satisfaction of the statutory requirement, and to determine applicability of the penalties for failure to timely submit the notification imposed by section 6652(c)(4) of the Code.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

The Form 8976 will be filed electronically.

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. In general, the statute requires organizations to submit basic information to the IRS within 60 days after they are formed. Previously, such organizations would not have been required to submit the same or similar information to the IRS until they file their first annual return or notice, which is not due until 4 ½ months (or 10 ½ months, with extensions) after the end of the organization’s first taxable year. Thus, the need for this information cannot be satisfied by any existing collection.

5. METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES

The collection of information provided for in the form imposes a minimal burden on organizations because it requires only a few pieces of basic information regarding the organization. Form 8976 is completed electronically, reducing paperwork. Furthermore, an organization need only submit the notification once over the course of its existence, within 60 days of legal formation.

6. CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES

The collection of information provided in Form 8976 occurs only once, when an organization submits the notification within 60 days of its date of formation. A less frequent collection would not allow IRS to make the determination of the tax treatment and therefore not allow the IRS to meet 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

The Internal Revenue Service published TD 9775 and REG-101689-16 on July 12, 2016 (81 FR 45008 and 45088 respectively).

We received no comments during the comment period in response to the Federal Register notice dated July 21, 2017 (82 FR 33945).

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 U.S.C. 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)” 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 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

With respect to the collection of information associated with the one-time submission of the notification, as reported on Form 8976, we estimate approximately 2,500 annual respondents with an expected annual burden per respondent of 45 minutes, equaling 1,875 total hours.

Authority	Description	# of Respondents	# Responses per Respondent	Annual Responses	Hours per Response	Total Burden
IRC § 506	Form 8976 (electronic only)	2500	1	2500	.75	1875
Totals				2500		1875

13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

The Notification must be submitted with a user fee, as provided by statute (section 506(e)). The user fee is currently $50.

14. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

To ensure more accuracy and consistency across its information collections, IRS is currently in the process of revising the methodology it uses to estimate burden and costs. Once this methodology is complete, IRS will update this information collection.

15. REASONS FOR CHANGE IN BURDEN

Burden associated with TD 9775 and REG-101689-16 is included in Form 8976. There is no change in the paperwork burden previously approved by OMB.

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 and/or form sunsets as of the expiration date. Taxpayers are not likely to be aware that the Service intends to request renewal of 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.