Form 7203, S Corporation
Shareholder Stock and Debt Basis Limitations
New
collection (Request for a new OMB Control Number)
No
Emergency
01/12/2022
12/20/2021
Requested
Previously Approved
6 Months From Approved
70,000
0
265,300
0
0
0
Internal Revenue Code (IRC) Section
1366 determines the shareholder’s tax liability from an S
corporation. IRC Section 1367 details the adjustments to basis
including the increase and decrease in basis, income items included
in basis, the basis of indebtedness, and the basis of inherited
stock. Form 7203 is filed by S corporation shareholders who receive
non-dividend distributions, claim losses, deductions, and credits
(including prior year losses, deductions, and credits) based on
their stock and debt basis of the S corporation. Form 7203 and its
separate instructions were developed to replace the 3-part
“Worksheet for Figuring a Shareholder’s Stock and Debt Basis” and
its related instructions formerly found in the Shareholder's
Instructions for Schedule K-1 (Form 1120-S).
Pursuant to Office of
Management and Budget (OMB) procedures established at 5 CFR
§1320.13, the Internal Revenue Service (IRS) requests emergency
processing for “Form 7203, S Corporation Shareholder Stock and Debt
Basis Limitations”. This emergency request covers the estate and
trust filers. The individual filers, such as sole proprietors, are
included in the 1545-0074 renewal, and the tax-exempt filers are
included in the 1545-0047 renewal. The Department of the Treasury
and the Internal Revenue Service (IRS) are requesting approval of a
new OMB Control Number under emergency procedures in connection
with efforts of the IRS to help S corporation shareholders figure
basis loss limitations and address audit issues resulting in
improperly claimed losses and deductions. Internal Revenue Code
(IRC) section 1366 determines the shareholder’s tax liability from
an S corporation. IRC section 1367 details the adjustments to basis
including the increase and decrease in basis, income items included
in basis, the basis of indebtedness, and the basis of inherited
stock. Form 7203 and its separate instructions replace the 3-part
worksheet formerly found in the Shareholder's Instructions for
Schedule K-1 (Form 1120-S). The IRS, American Institute of
Certified Public Accountants (AICPA), and others agreed a new form
was needed to formalize the basis computation to assist taxpayers
accurately calculate and attach the required basis computation.
Emergency approval of this collection is essential to the mission
of the IRS. The new form will allow taxpayers to accurately compute
and properly report their stock and debt basis limitations on their
tax returns. It will also provide the IRS with the information
needed for tax compliance activities regarding claimed losses and
deductions. The IRS plans to release Form 7203 by January 12, 2022,
and thus requests approval of the control number by that date. The
IRS sought public comments on the information collection in the
Federal Register (86 FR 38204) on July 19, 2021. IRS received
numerous comments, which were carefully considered, and IRS
provided responses to the comments received. Given the number of
public comments and the need to get the form published for the
upcoming tax season, the IRS respectfully requests a waiver from
the requirement to publish notice in the Federal Register seeking
public comment during the period of Office of Management and Budget
review. However, additional public comment will be solicited in
conjunction with a subsequent extension of the approval to collect
this information.
US Code:
26
USC 1366 Name of Law: Pass-Thru Of Items To Shareholders
US Code: 26
USC 1367 Name of Law: Adjustments To Basis Of Stock Of
Shareholders, Etc.
US Code: 26 USC
50 Name of Law: Other special rules
US Code: 26
USC 351 Name of Law: Transfer to corporation controlled by
transferor
US Code: 26
USC 357 Name of Law: Assumption of liability
US Code: 26
USC 358 Name of Law: Basis to distributees
US Code: 26
USC 6103 Name of Law: Confidentiality and disclosure of returns
and return information
This is a new form developed to
replace the 3-part “Worksheet for Figuring a Shareholder’s Stock
and Debt Basis” and its related instructions formerly found in the
Shareholder's Instructions for Schedule K-1 (Form 1120-S). There
was no paperwork burden previously approved by OMB. We are making
this submission to request OMB approval.
$0
No
Yes
Yes
No
No
No
No
William Woolf 202
317-5761
No
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 7203 Form 7203
Form 7203 - Emergency Justification Memo to OMB_Signed.pdf
2021 Supporting Statement 1545-XXXX - Form 7203_ag.docx
Form 7203