The collection covers the new
information reporting requirements under IRC 162(f) and new 6050X,
which was added by the Tax Cuts and Jobs Act (TCJA). Generally, no
deduction is allowed for any amount paid to, or at the direction
of, a government or specified nongovernmental entity for the
violation of any law. The general rule does not apply to the
following exceptions: • Amounts that constitute restitution
(including remediation of property); • Amounts paid to come into
compliance with the law; • Amounts paid or incurred as the result
of certain court orders in which no government or specified
nongovernmental agency is a party; and • Amounts paid or incurred
for taxes due. To be deductible under an exception, the Taxpayer
must establish that an amount required to be paid is for
restitution, remediation or to come into compliance with the law,
AND the amount must be specifically identified in the settlement
agreement or court order as restitution, remediation or to come
into compliance with the law. Any amount paid or incurred as
reimbursement to the Government for the costs of any investigation
or litigation are not deductible under one of the exceptions (under
prior law, these amounts were often considered compensatory and
deductible). The 2017 Tax Cuts and Jobs Act also enacted IRC
section 6050X, which requires government agencies or specified
nongovernmental regulatory entities to file an information return
which identifies: 1. The amount required to be paid as a result of
the suit or agreement to which IRC section 162(f)(1) applies; 2.
Any amount required to be paid as a result of the suit or agreement
that constitutes restitution or remediation of property; and 3. Any
amount required to be paid as a result of the suit or agreement for
the purpose of coming into compliance with any law that was
violated or involved in the investigation or inquiry. This
reporting requirement will not be required with respect to amounts
paid or incurred under a binding court order or agreement entered
into before the date provided in the future proposed regulations,
which will be no earlier than January 1, 2019. Notice 2018-23
provides information for section 6050X and transitional guidance
under IRC § 162(f).
Through Notice 2018-23, the IRS
provided transitional guidance under §§ 162(f) and 6050X.
Specifically, as provided in section 3.01 of this notice, to ensure
efficient administration of this new provision, reporting will not
be required under § 6050X until the date specified in the proposed
regulations. The Department of the Treasury (“Treasury Department”)
and the Internal Revenue Service (“IRS”) intend to publish proposed
regulations under §§ 162(f) and 6050X. The IRS estimates an initial
increase in burden of 200 responses and 24 hours per year.
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:
(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;
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.
Form 1098-F Section 6050X- Reporting
Supporting Statement (1098-F).docx
Section 6050X- Reporting