The revenue procedure provides for
determining when statistical sampling may be used for purposes of
section 199, which provides a deduction for income attributable to
domestic production activities, and establishes acceptable
statistical sampling methodologies. The collection of information
in the proposed revenue procedure involves a recordkeeping
requirement for taxpayer that use statistical sampling under
section 199.
We are requesting
emergency review of this submission and seek OMB approval by April
2, 2007. Section 199 was added to the Internal Revenue Code by
section 102 of the American Jobs Creation Act of 2004 (Public Law
108-357), and amended by section 403(a) of the Gulf Opportunity
Zone Act of 2005 (Public Law 109-135), section 514 of the Tax
Increase Prevention and Reconciliation Act of 2005 (Public Law
109-222), and section 401 of the Tax Relief and Health Care Act of
2006 (Public Law 109-432). Section 199 is a complex tax provision
requiring taxpayers, particular large corporate taxpayers with
multiple businesses and subsidiaries, to make very complicated
calculations. The IRS published proposed regulations in the Federal
Register on November 4, 2005 (70 FR 67220). The proposed
regulations state that certain large taxpayers may use statistical
sampling for §199 purposes. The proposed regulations and final
regulations published in the Federal Register on June 1, 2006 (71
FR 31268) do not provide specific rules on the use of statistical
sampling for §199 purposes. The proposed revenue procedure provides
statistical sampling rules and many large corporate taxpayers have
told the IRS that they will use statistical sampling for their 2006
tax returns. Without statistical sampling, taxpayers may forgo the
benefit of §199 due to the tremendous cost of complying with the
provision. Publication of the proposed revenue procedure later in
2007 will limit the availability of statistical sampling for 2006
returns. Furthermore, taxpayers have expressed a pressing need for
guidance in this area in order to comply with their financial
reporting obligations under FIN 48 which is generally required to
be implemented by publicly traded companies in the first quarter of
2007. Therefore, we respectfully request that the consideration of
this submission and provision of an OMB number be completed by
April 2, 2007. Any other result will be detrimental to the
taxpaying public and will interfere with the mission of the
IRS.
US Code:
26
USC 6103 Name of Law: Confidentiality and disclosure of returns
and return
US Code: 18
USC 2257 Name of Law: Record keeping requirements
PL:
Pub.L. 108 - 357 102 Name of Law: American Jobs Creation Act of
2004
PL:
Pub.L. 109 - 222 514 Name of Law: Tax Increase Prevention and
Reconciliation Act of 2005
PL:
Pub.L. 109 - 432 401 Name of Law: An act to amend the Internal
Revenue Code of 1986 to extend expiring provisions, and for other
purpo
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.
Supporting Statement [RP-144921-06].doc
RP-144921-06, Statistical Sampling for purposes of Section 199