Dividend Equivalents from Sources within the United States REG-120282-10 ( TD 9734) & Forms 1042, 1042-S and 1042-T

Forms and Documents

Document Name	Status
Form 1042 Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons Form	Unchanged
Form 1042-T Annual Summary and Transmittal of Forms 1042-S Form and Instruction	Unchanged
Form 1042-S Foreign Person's U.S. Source Income Subject to Withholding Form	Modified
Supporting Statement.docx Supporting Statement A	2020-08-03
REG–120282–10 2nd NPRM.pdf Supplementary Document	2015-08-21
REG–157714–06.pdf Supplementary Document	2015-08-21
OMB Expiration.docx Supplementary Document	2015-08-20

IC Document Collections

IC ID	Document Title	Status
39506	Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons Form	Unchanged
217930	REG-120282-10 (TD 9734 ) Dividend Equivalents from Sources within the United States	Unchanged
185426	Annual Summary and Transmittal of Forms 1042-S Form and Instruction	Unchanged
185425	Foreign Person's U.S. Source Income Subject to Withholding Form	Modified

ICR Details

OMB Control No: 1545-0096	ICR Reference No: 202007-1545-017
Status: Historical Inactive	Previous ICR Reference No: 201909-1545-012
Agency/Subagency: TREAS/IRS	Agency Tracking No:
Title: Dividend Equivalents from Sources within the United States REG-120282-10 ( TD 9734) & Forms 1042, 1042-S and 1042-T
Type of Information Collection: Revision of a currently approved collection	Common Form ICR:  No
Type of Review Request: Regular
OIRA Conclusion Action: Preapproved	Conclusion Date: 09/14/2020
	Date Received in OIRA: 08/04/2020
Terms of Clearance: 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.

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	09/30/2022	36 Months From Approved	05/31/2023
Responses	3,617,200	0	3,611,200
Time Burden (Hours)	2,949,074	0	2,945,594
Cost Burden (Dollars)	0	0	0

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Abstract: The previously approved regulations pertain to section 871(m) regarding dividend equivalent payments that are treated as U.S. source income. These regulations provide guidance regarding when payments made pursuant to certain financial instruments will be treated as U.S. source income and subject to U.S. withholding tax. The information provided is necessary to permit withholding agents to determine whether U.S. withholding tax is due with respect to a payment of a dividend equivalent and the amount of the tax. The information will also be used for audit and examination purposes. Form 1042 is used by withholding agents to report tax withheld at source on certain income paid to nonresident alien individuals, foreign partnerships, and foreign corporations to the IRS. Form 1042-S is used by withholding agents to report income and tax withheld to payees. A copy of each 1042-S is filed magnetically or with Form 1042 for information reporting purposes. The IRS uses this information to verify that the correct amount of tax has been withheld and paid to the United States. Form 1042-T is used by withholding agents to transmit Forms 1042-S to the IRS.

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Authorizing Statute(s): US Code: 26 USC 6001 Name of Law: Notice or regulations requiring records, statement, and special returns
   US Code: 26 USC 6103 Name of Law: Confidentiality and disclosure of returns and return information
   US Code: 26 USC 871 Name of Law: Tax on nonresident alien individuals
   US Code: 26 USC 1441 Name of Law: Withholding of tax on nonresident aliens
   US Code: 26 USC 1442 Name of Law: Withholding of tax on foreign corporations
   US Code: 26 USC 1461 Name of Law: Liability for withheld tax
  

Citations for New Statutory Requirements: US Code: 26 USC 1446(f) Name of Law: Special rules for withholding on dispositions of partnership interests

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
1545-BO60	Proposed rulemaking	84 FR 21198	05/13/2019

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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: 4

IC Title	Form No.	Form Name
REG-120282-10 (TD 9734 ) Dividend Equivalents from Sources within the United States
Foreign Person's U.S. Source Income Subject to Withholding	1042-S	Foreign Person's U.S. Source Income Subject to Withholding
Annual Summary and Transmittal of Forms 1042-S	1042-T	Annual Summary and Transmittal of Forms 1042-S
Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons	1042	Annual Withholding Tax Return for U.S. Source Income of Foreign Persons

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ICR Summary of Burden

	Total Request	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	3,617,200	3,611,200	6,000	0	0	0
Annual Time Burden (Hours)	2,949,074	2,945,594	3,480	0	0	0
Annual Cost Burden (Dollars)	0	0	0	0	0	0

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

Burden Increase Due to:

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

Burden Reduction Due to:

Short Statement: The information in proposed § 1.1446(f)–4(e)(2) provided by the transferor to the IRS will be used to claim a credit for an amount withheld under section 1446(f)(1) and proposed § 1.1446(f)–4, and will be satisfied by submitting Form 1042–S with an income tax return (Form 1040NR or 1120–F) to the IRS. Data for Form 1042–S represent preliminary estimates of the total number of interests in publicly traded partnership engaged in the conduct of a trade or business in the United States that will be transferred by foreign persons. This will increase the 1042-S estimated returns by 6,000 and the estimated annual burden by 3,480 hours. Forms will be updated in the next revision cycle.

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Annual Cost to Federal Government: $151,885

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.     Yes

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? No

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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: 08/04/2020

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