2020 Supporting Statement 1545-0035

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SUPPORTING STATEMENT
Internal Revenue Service
(FORMS; 943, 943-PR, 943-A, 943-A-PR, 943-R, 943-X, and 943-X-PR)
Employer’s Annual Tax Return for Agricultural Employees Series
OMB # 1545-0035

    1.  CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Sections 3101(a) and (b), and 3111(a) and (b), 3402(p), and 6011(a) and (b) of the Internal Revenue Code and sections 31.6011(a)-1 and 31.6011(a)-4 of the Employment Tax Regulations require agricultural employers to report (a) the employees' and employers' FICA taxes on wages and (b) the amounts withheld for income tax.  Form 943 is used for this purpose.

Sections 3101(a) and (b), 3111(a) and (b), and 6011(a) and (b) of the Internal Revenue Code and section 31.6011(a)-1 of the Employment Tax Regulations require agricultural employers in Puerto Rico to report the employees' and employers' FICA taxes on wages.  Form 943-PR is used for this purpose.

Section 6302(c) of the Internal Revenue Code and section 31.6302-l(g) of the Employment Tax Regulations require agricultural employers who are semiweekly depositors to deposit the taxes accumulated during the semiweekly period within 3 banking days of the end of the period.  Section 31.6302-l(c)(3) of the Employment Tax Regulations requires that agricultural employers, who on any day within a deposit period accumulate $100,000 or more of employment taxes, must deposit them by the close of the next banking day.  Forms 943-A and 943A-PR are optional forms that may be used by agricultural employers to show their tax liabilities for the semiweekly periods and $100,000 one-day rule.

Public Law Families First Coronavirus Response Act 116-127, Sections 7001 and 7003 (Payroll Credit for Required Paid Sick Leave) shall allow a credit against the tax imposed by section 3111(a). Public Law Coronavirus Aid, Relief, and Economic Security Act 116-136, Sections 2301 (Employee Retention Credit for Employers Subject to Closure Due to Covid-19), shall allow a credit against applicable employment taxes and 2302 (Delay of Payment of Employer Payroll Taxes), the payment of applicable employment taxes for the payroll tax deferral period.

Sections 3511 and 7705 generated Form 943-R which is used by CPEOs to report and allocate the aggregate payroll information reported on Form 943 to each specific agricultural client.   

Form 943-X is used to correct errors made on Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees, for one year only.

Form 943-X-PR, for use in Puerto Rico, is used to correct errors made on Form 943, Employer’s Annual Federal Tax Return for Agricultural Employees, for one year only. 

    2.  USE OF DATA
              
This form will provide to the agency specific payroll data by client, regarding the agricultural payroll information that is reported in aggregate form on Form 943. The data will be used to monitor and ensure that professional employer organizations are complying with their tax withholding, depositing and reporting obligations.

    3.  USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

Electronic filing is available for Form 943, Form 943-PR and Form 943 Schedule R.  
We have no plans at this time to offer electronic filing for 943-A, 943A-PR, 943-X, and 943-X-PR due to low volume of filers. 

    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 is no flexibility to reduce burden on small businesses or other small entities because the statutes apply to small businesses and small entities.  

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

A less frequent collection will not enable the IRS to determine compliance applicable to the agency specific payroll data by client regarding the agricultural payroll information that is reported in aggregate on the Form 943 series.  If the data is not collected the IRS will be unable to monitor and ensure that professional employer organizations are complying with their tax withholding, depositing and reporting obligations and the IRS would be unable 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

In response to the Federal Register notice dated July 29, 2020 (85 FR 45738), IRS received no comments during the comment period regarding Forms 943, 943-PR, 943-A, 943-A-PR, 943-R, 943-X, and 943-X-PR.

    9. EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS

No payment of gift will be provided to 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

         A privacy impact assessment (PIA) has been conducted for information collected under this   
         request as part of the “Business Master File Document Specific” system under IRS 24.030- 
         Individual Master File Customer Acct Data Engine C, IRS 24.064-Business Master File, and IRS 
         34.037-IRS Audit Trail & Security Records System.

12.  ESTIMATED BURDEN OF INFORMATION COLLECTION

         The burden estimate is as follows:

Authority
Description
Annual Responses
Hours per Response
Total Burden

Form 943 mail out
337,000
17.63
5,941,310

Form 943 Over the counter (OTC)
332,000
13.25
4,399,000

Form 943 Voucher
157,625
.24
37,830

Form 943 Voucher OTC
    8,300
.97
      8,051
IRC § 3301
Total of Form 943
834,925

10,386,191






Form 943-PR
5,305
11.55
61,273

Form 943PR/943(PR) OTC
1,305
.73
953

Form 943-PR Voucher preprinted
 4,000
.24
     960
IRC § 3301
Total of Form 943 PR
10,610

63,186





IRC § 6302
Total of Form 943-A
10,000
8.51
85,100





IRC § 6302
Total of Form 943A-PR
138
8.51
1,175





IRC § 6205
Total of Form 943-X
100,000
17.31
1,731,000





IRC § 6205
Total of Form 943X-PR
10,000
17.31
173,100





IRC § 3511
Total of Form 943 Sch R 
25
21.31
533





Grand Total

965,698

12,440,285

The following regulations impose no additional burden.  Please continue to assign OMB number 1545-0035 to these regulations.
31.6011(a)-1(2)

31.6011(a)-1(2)
31.6011(a)-1
31.6011(a)-4
31.6302-1
31.3511
13.   ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

 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 to reflect 
 a more precise estimate of burden and costs.

14.   ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

        The Federal government cost estimate is based on a model that considers the following  
        three cost factors for each information product:  aggregate labor costs for development, 
        including annualized start up expenses, operating and maintenance expenses, and 
        distribution of the product that collects the information.  

The government computes cost using a multi-step process.  First, the government creates 
a weighted factor for the level of effort to create each information collection product 
based on variables such as; complexity, number of pages, type of product and frequency 
of revision.  Second, the total costs associated with developing the product such as labor 
cost, and operating expenses associated with the downstream impact such as support   
functions, are added together to obtain the aggregated total cost. Then, the aggregated 
total cost and factor are multiplied together to obtain the aggregated cost per product.  
Lastly, the aggregated cost per product is added to the cost of shipping and printing each 
product to IRS offices, National Distribution Center, libraries and other outlets. The 
result is the Government cost estimate per product. 

The government cost estimate for this collection is summarized in the table below.

Product
Aggregate Cost per Product (factor applied)

Printing and Distribution

Government Cost Estimate per Product
  Form 943
32,807
+
3,717
=
36,524
Form 943 (Instructions)
5,468

1,243

  6,711
Form 943A
10,936



10,936
Form 943APR
10,936



10,936
Form 943PR
32,807



32,807
Form 943PR (Instruction)
  5,468



  5,468
Form 943X
12,758



12,758
Form 943X (Instruction)
  5,012



   5,012






 Instructions
           



       
Grand Total
           116,192

4,960

       121,152
Table costs are based on 2018 actuals obtained from IRS Chief Financial Office and Media and Publications
* New product costs will be included in the next collection update. 

15.	REASONS FOR CHANGE IN BURDEN

New lines were added to report qualified sick leave wages and qualified family leave wages, to calculate the employee share of social security tax on qualified sick and family leave wages, and to report the nonrefundable portion of the credit for qualified sick and family leave wages and retention credit. The instructions will have a worksheet to figure these amounts. Additional lines are added to report total nonrefundable credits, to report the deferred payment of the employer share of social security tax, to report the refundable portion of the credit for qualified sick and family leave wages and refundable portion of the employee retention credit. Editorial changes and lines to report the totals, and request additional information related to the new credits were also added. 

Schedule R (Form 943) has been revised to accommodate all of the new lines added to the 2020 Form 943.

The above changes will result in an overall burden program change increase of 1,557,147 hours.

 
Requested
Program Change Due to New Statute
Program Change Due to Agency Discretion
Change Due to Adjustment in Agency Estimate
Change Due to Potential Violation of the PRA
Previously Approved
Annual Number of Responses
  965,698
  0
  0
  0
  0
        965,698
Annual Time Burden (Hr)
  12,440,285
  0
  1,557,147
  0
  0
  10,883,138


      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

  IRS believes 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 IRS 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 for this collection.


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.