SUP STAT 1545-0108 (Form 1096)

SUPPORTING STATEMENT

Internal Revenue Service

Form 1096, Annual Summary and Transmittal of U.S. Information Returns

OMB Control Number 1545-0108

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Sections 408(i), 6041 through 6045, 6047, 6049, 6050A, 6050B, 6050D, 6050E, 6050H, 6050J, 6050N, and 6050P of the Internal Revenue Code (IRC), provide for the filing of information returns to report the payment of certain types of income, mortgage interest, and IRA contributions.

Form 1096, is used by taxpayers to transmit paper forms 1097, 1098, 1098-F, 1099, 1099-LS, 1099-SB, 3921, 3922, 5498, and W-2G to the IRS.

2. USE OF DATA

Filers use Form 1096 to transmit paper Forms 1097, 1098, 1098-F, 1099, 1099-LS, 1099-SB, 3921, 3922, 5498, and W-2G to the Internal Revenue Service (IRS). The IRS uses this information to summarize, categorize, and process the forms being filed.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

Form 1096 with all applicable information returns filed on paper are mailed to specific IRS processing centers based on the taxpayer’s principal business, office, or legal residence.

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. Small businesses have the option to transmit forms 1097, 1098, 1098-F, 1099, 1099-LS, 1099-SB, 3921, 3922, 5498, and W-2G electronically through the Filing Information Returns Electronically (FIRE) System.

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

A less frequent collection would result in the IRS being unable to obtain the information outlined in the cited regulations, which will complicate the taxpayer’s ability to receive proper tax credit and reduce the Agency’s ability to verify the accuracy of said credits.

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 26, 2021 (86 FR 40137), IRS received no comments during the comment period regarding Form 1096.

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 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 (BMF)” system and a Privacy Act System of Records notice (SORN) has been issued for this system under IRS 24.046-Customer Account Data Engine Business Master File. The Internal Revenue Service PIAs 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

OMB Collection	Authority	Form	Annual Responses	Hours per Response	Total Burden
IRS 1545-0108	IRC 1.6041-1	1096	5,640,300	.23	1,297,269
	IRS TOTAL		5,640,300		1,297,269

Please continue to assign OMB number 1545-0108 to this regulation.

1.6041-1

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	$ 96,534		$48,749		145,283
Table costs are based on 2021 actuals obtained from IRS Chief Financial Office and Media and Publications

15. REASONS FOR CHANGE IN BURDEN

There are no changes being made to the paperwork burden previously approved by OMB. IRS is submitting this form for renewal purposes.

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 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 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 if 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.