Supporting Statement-1545-1081-MS

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SUPPORTING STATEMENT

Internal Revenue Service

Application for Extension of Time to File Information Returns

OMB # 1545-1081

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Internal Revenue Code Section 6081 allows filers to file an extension of time to file. Treasury Regulation 1.6081-8 specifies that Forms W-2, W-2G, 1042-S, 1094-C, 1095, 1097, 1098, 1099, 3921, 3922, 5498, and 8027 can use Form 8809 to request the extension. Certain required information must be provided before the Internal Revenue Service (IRS) can evaluate the request. The form guarantees that complete information is submitted. IRS will review the information contained on the form to determine whether an extension should be permitted.

2. USE OF DATA

The reporting requirements placed on the filers allows the IRS to examine the information submitted to determine whether the filer should be given the extension of time to file the information returns.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

Extensions may be requested:

• Online by completing a fill-in Form 8809 through the FIRE System at https://fire.irs.gov.

• Electronically through the FIRE System in a file formatted according to the specifications in Pub. 1220.

• On paper Form 8809 by mailing the form to the address shown in Where to file section in the instructions.

4. EFFORTS TO IDENTIFY DUPLICATION

The IRS is the only Agency with the authority to collect this information; therefore, it is not duplicated elsewhere in the Federal government.

5. METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby certified that this regulation and Form 8809 will not have a significant economic impact on a substantial number of small entities. Although the regulation may potentially affect a substantial number of small entities, the economic impact on these entities is not expected to be significant. If at least one of the criteria for granting an extension applies, a business may obtain a 30-day extension of time to file by properly completing Form 8809, so many businesses will still obtain an extension of time to file. Prior versions of section 1.6081–8 also required businesses to file Form 8809 to obtain an extension, so no additional economic impact is associated with the requirement to file this form. For businesses that do not qualify for the extension, the regulation do not impose new information reporting requirements, but they do affect whether the filing due date may be extended. Although there may be some additional costs associated with ensuring that information returns filed by their statutory due date, as opposed to the extended due date, are accurate, those costs will not impose a significant economic impact on a substantial number of small entities.

In addition, statutory changes have minimized the benefit of the automatic extension of time to file. Prior to these changes, most filers had a due date (without regard to extensions) of March 31 for the information returns currently subject to the rule eliminating the automatic extension of time to file—the Form W–2 series (except Form W–2G) and Form 1099–MISC reporting nonemployee compensation. With the automatic extension, these filers generally had until April 30 to file these information returns. The PATH Act and the accompanying regulations accelerated the due date for the Form W–2 series (except Form W–2G) and Form 1099–MISC reporting nonemployee compensation from March 31 to January 31. Therefore, even if the automatic extension was still available, the Form W–2 series (except Form W–2G) and Form 1099–MISC reporting nonemployee compensation would be due much earlier than under prior law, so the statutory change under the PATH Act is the primary cause of any additional cost associated with having to file these forms earlier in the filing season. Pursuant to section 7805(f) of the Code, the notice of proposed rulemaking preceding these regulations was submitted to the Chief Counsel for Advocacy of the Small Business Administration for comment on its impact on small business. No comments were received from the Small Business Administration.

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

A less frequent collection will not enable the IRS to determine if the filer should be granted an extension of time to file the information returns in accordance with Internal Revenue Code section 6081.

6. 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).

6. CONSULTATION WITH INDIVIDUALS OUTSIDE OF THE AGENCY ON AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS

Periodic meetings are held between IRS personnel and representatives of the American Bar Association, the National Society of Public Accountants, the American Institute of Certified Public Accountants, and other professional groups to discuss tax law and tax forms. During these meetings, there is an opportunity for those attending to make comments regarding Form 8809.

We received no comments during the comment period in response to the Federal Register notice (88 FR 40926), dated June 22, 2023.

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

No payment or gift has been provided to any respondents.

6. ASSURANCE OF CONFIDENTIALITY OF RESPONSES

Generally, tax returns and tax return information are confidential as required by 26 USC 6103.

6. JUSTIFICATION OF SENSITIVE QUESTIONS

A privacy impact assessment (PIA) has been conducted for information collected under this request as part of the “Filing Information Returns Electronically (FIRE)” system and Privacy Act System of Records notices (SORN) have been issued for this system under IRS 22.026 – Form 1042–S Index by Name of Recipient; IRS 22.061 – Wage and Information Returns Processing; IRS 42.021 – Compliance Programs and Projects Files, and IRS 34.037–IRS Audit Trails and Security Records System.

The Department of Treasury PIAs can be found at https://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.

6. ESTIMATED BURDEN OF INFORMATION COLLECTION

Form 8809 is used to request an initial or additional extension of time to file the specific forms for the current tax year. Payers/filers who need more time to file information returns with the IRS should file this form before the filing due date.

The total burden for these requirements is estimated to be 3,893,465 hours.

Authority	Description	# of Respondents	# Responses per Respondent	Annual Responses	Hours per Response	Total Burden
IRC § 6801	Form 8809	821,406	1	821,406	4.74	3,893,465
Totals		821,406		821,406		3,893,465

The following regulation imposes no additional burden. Please continue to assign OMB number 1545-1081 to this regulation.

1.6081-8

6. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

As suggested by OMB, our Federal Register notice dated June 22, 2023, requested public comments on estimates of cost burden that are not captured in the estimates of burden hours, i.e., estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information. However, we did not receive any responses from taxpayers on this subject.

Estimated Annualized Respondent Cost and Hour Burden

Authority	No. of Respondents	No. of Responses per Respondent	Total Responses	Average Burden (Hours)	Total Burden (Hours)	Hourly Wage Rate	Total Burden Cost
Form 8809	821,406	1	821,406	4.74	3,893,465	$60.42	$49,629,351
Totals	821,406		821,406		3,893,465		$49,629,351

The IRS estimates the total annual cost to respondents at $49,629,351.  To arrive at this figure, the average annual responses of 821,406 were multiplied by $60.42 per hour. 

IRS anticipates that taxpayers may use an accountant to file the extension requests.

The above Hourly Wage Rate is the May 2022 Bureau of Labor Statistics mean wage for “Accountants and Auditors” (Major Group (13-2011)” of $41.70 times the wage rate benefit multiplier of 1.4488 (to account for fringe benefits) equaling a fully-loaded wage rate of $60.42.

The benefits multiplier is estimated by dividing total compensation of $43.26 by salaries and wages of $29.86, based on Employer Cost for Employee Compensation, June 2023 data, released September 12, 2023 (https://www.bls.gov/news.release/ecec.nr0.htm).

6. 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
8809	$ 26,175		$ 0		$ 26,175
Grand Total	$ 26,175		$ 0		$ 26,175
Table costs are based on 2022 actuals obtained from IRS Chief Financial Officer and Media and Publications

6. REASONS FOR CHANGE IN BURDEN

There is no change to the form. However, the filing estimates have been updated. This will result in a total estimated burden increase of 3,656,464 hours. We are making this submission to renew the OMB approval.

ICR Summary of Burden:

	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	821,406	0	0	771,406	0	50,000
Annual Time Burden (Hr.)	3,893,465	0	0	3,656,464	0	237,000

6. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION

There are no plans for tabulation, statistical analysis and publication.

6. REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE

We believe that displaying the OMB expiration date is inappropriate because it could cause confusion by leading taxpayers to believe that the regulation and 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.

6. 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.