2021 Supporting Statement (1545-1960) Form 3949-pt2

Supporting Statement

Internal Revenue Service

(Form 3949-A) Information Referral

OMB #1545-1960

1. CIRCUMSTANCES NECESSITATING COLLECTION OF

INFORMATION

Individuals wishing to report alleged tax violations may contact a Toll-Free telephone operated by the Customer Service Function of the Internal Revenue Service (IRS). Here, an IRS employee would transcribe information provided by the caller to an internal form. Persons calling who do not have all of the required information to complete the form are advised to re-contact the Service after obtaining the necessary facts. Pursuant to Title 26 of the United States Code (USC) 7801 and Code section 6103, completed forms are subject to review and forwarded to appropriate areas as dictated by the instructions in the Internal Revenue Manual (IRM). Experience has shown only a small number of these referrals result in any further action by the Service.

Recent and pending Funding constraints have it necessary for Customer Service to consider several program areas where reductions might be made. The objective was to reduce costs and preserve essential tax related services to our customer base. It has been determined we can obtain essentially the same information regarding alleged tax violations from the public without the need to provide live service. This will allow the Service to re-deploy highly skilled employees presently performing this duty to other tax program areas.

Form 3949-A provides callers with a form that may be completed at the convenience of the caller. The form has been designed to capture the essential information needed by IRS for an initial evaluation of the report. Upon return, the Service will conduct the same back-end processing required under present IRM guidelines.

Submission of the information to be included on the form is entirely voluntary on the part of the caller and is not a requirement of the Tax Code.

2. USE OF DATA

Form 3949-A captures the data regarding alleged violations tax law. Any additional information burden is minimized. The data that is or will be required is the minimum required to identify a potential violator and conduct an initial review for potential follow-up action. This includes:

a. Name, address, Identification Number (Individual and/or Business), occupation, martial status, and date of birth. This information is required to identify the potential violator in our database(s).

b. Alleged violation. Determines appropriate area for any follow-up action.

c. Unreported Income and Tax Years. Same as above. Amount and of tax years involved determine where referral is routed.

d. Remarks. For caller to describe the alleged violation, how the information was obtained.

e. Name, address, and contact telephone number of the caller. Needed if additional facts or information is required to evaluate the report.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

We are currently developing opportunities to electronically submit the Form 3949-A to reduce burden.

4. EFFORTS TO INDENTIFY DUPLICATION

The information obtained through this collection is unique and is not already available for use or adaptation from another source.

5. METHODS TO MINIMZE BURDEN ON SMALL BUSINESS OR OTHER SMALL ENTITIES

The collection of information requirement will not have a significant economic impact on a substantial number of small entities.

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

The consequences are that the IRS will have to spend more taxpayer assistance resources to collect this data through other means. This will compromise the Agency’s ability to enforce tax compliance. Tax compliance is a vital part of the government’s ability to meet its’ mission and serve the public.

7. SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE INCONSISTENT ELINES 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 THE AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS

In response to the Federal Register notice dated September 16, 2021 (86 FR 51725), we received no comments during the comment period regarding Form 3949-A.

9. EXPLANTION 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 “Compliance Data Warehouse (CDW)” system and a Privacy Act System of Records notice (SORN) has been issued for this system under:

• IRS 22.034--Individual Returns Files, Adjustments and Miscellaneous Documents

• IRS 22.054--Subsidiary Accounting Files

• IRS 22.060--Automated Non–Master File (ANMF)

• IRS 22.062--Electronic Filing Records

• IRS 24.030--CADE Individual Master File (IMF)

• IRS 24.046--CADE Business Master File (BMF)

• IRS 26.020--Taxpayer Delinquency Investigation (TDI) Files

• IRS 34.037--IRS Audit Trail and Security Records System

• IRS 42.008--Audit Information Management System (AIMS)

• IRS 42.021--Compliance Programs and Projects Files

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

The burden estimation is as follows:

Authority	Description	# of Respondents	#Responses per Respondent	Annual Responses	Hours per Response	Total Burden
	Form 3949-A	215,000	1	215,000	.25	53, 750
Total		215,000		215,000	.25	53,750

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 ANNAULIZED COST TO THE FEDERAL GOVERNMENT

The primary cost to the government consists of the costs of printing Form 3949-A, $4,000.

15. REASON FOR CHANGE IN BURDEN

There are no changes being made to this form at this time. IRS is making this submission for renewal purposes.

16. PLANS FOR TABUALTION, 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 regulation sunsets as of the expiration date. Taxpayers are not likely to be aware that the Service 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.

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 U.S.C. 6103.