OMB understands that the IRS is currently in the process of revising the methodology it uses to estimate burden and costs. OMB expects that future ICRs under this OMB control number will include dollar estimates of annual burden costs to taxpayers calculated using this revised methodology.
In future submissions, response 5 should be updated to reflect how the IRS has considered methods to minimize burden on small businesses or other small entities.
Inventory as of this Action
Requested
Previously Approved
03/31/2023
36 Months From Approved
03/31/2020
406,250
0
406,250
212,500
0
212,500
0
0
0
Sections 1291 thru 1297 of the Internal Revenue Code of 1986 provide special rules for the taxation of shareholders of passive foreign investment companies (PFICs). Section 1295 of the Code permits a shareholder to elect to treat a PFIC as a qualified electing fund (QEF) in order to include a pro rata share of the QEFâs annual earnings under section 1293. If the shareholder makes the QEF election after the first year as a PFIC in the shareholderâs holding period of the foreign corporation, the shareholder is subject to both sections 1291 and 1293. The final regulations provide rules for elections that may be made by shareholders of such QEFs.
This collection covers final regulations added to the Income Tax Regulations (26 CFR part 1) under section 1291(d)(2) of the Internal Revenue Code. The final regulations provide rules for making a deemed sale or deemed dividend election to purge a shareholderâs holding period of stock of a PFIC of those taxable years during which the PFIC was not a QEF. The Tax Reform Act of 1986 added section 1291(d)(2)(A), relating to the deemed sale election, effective for taxable years of foreign corporations beginning after December 31, 1986. The Technical and Miscellaneous Revenue Act of 1988 amended section 1291(d)(2) to add new section 1291(d)(2)(B), relating to the deemed dividend election, effective for taxable years of foreign corporations beginning after December 31, 1986.
US Code:
26 USC 1291
Name of Law: Interest on tax deferral.
US Code:
26 USC 1295
Name of Law: Qualified electing fund.
US Code:
26 USC 1296
Name of Law: Election of mark to market for marketable stock.
US Code:
26 USC 1297
Name of Law: Election of mark to market for marketable stock.
US Code:
26 USC 1298
Name of Law: Special rules.
There is no change in the paperwork burden previously approved by OMB. We are making this submission to renew the OMB approval. We restructured the information collection to clearly outline the burden and reallocate the burden under the appropriate regulations. There was no increase or decrease in overall burden.
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.
2019_1545-1507 draft supporting statement update.doc
Deemed sale election