Supporting Statement - For Form 8926

SUPPORTING STATEMENT
1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Pursuant to a Congressional directive to determine whether the earnings stripping limitation rule of Code section 163(j)
was effective in curbing the erosion of the U.S. tax base, CC:INTL, LMSB, and the Treasury sought to create new Form
8926, Disqualified Corporate Interest Expense Disallowed Under Section 163(j) and Related Information. This form and
its instructions have been in the developmental stage since August 2007.

2. USE OF DATA
Form 8926 will provide the Service and the Treasury with information to assist in effectively administer Code section
163(j).

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
Upon approval, we plan to offer electronic filing.

4. EFFORTS TO IDENTIFY DUPLICATION
We have attempted to eliminate duplication within the agency wherever possible.

5. METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES
The form is to be filed within the Form 1120 family.

6. CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR
POLICY ACTIVITIES
Not applicable.

7. SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE INCONSISTENT
WITH GUIDELINES IN 5 CFR 1320.5(d)(2)
Not applicable.

8. 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 8926.
We will publish a notice in the Federal Register in the near future to solicit public comments on Form 8926.

9. EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS
Not applicable.

10. ASSURANCE OF CONFIDENTIALITY OF RESPONSES
Generally, tax returns and tax return information are confidential as required by 26 U.S.C. 6103.

11. JUSTIFICATION OF SENSITIVE QUESTIONS
Not applicable.

12. ESTIMATED BURDEN OF INFORMATION COLLECTION
List the number of responses, time per response, and total burden for each form included in the submission.
Number of
Time per
Total
Form
Responses
Response
Hours
8926
500,000
15 Hrs. 12 mins.
7,560,000
Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time.

13. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide
information are not available at this time.

14. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT
After consultation with various functions within the Service, we have determined that the cost of developing,
printing, processing, distribution and overhead for the form is $10,000.

15. REASONS FOR CHANGE IN BURDEN
Not applicable.

16. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION
Not determined at this this time.

17. REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE
Not appliable.

18. EXCEPTIONS TO THE CERTIFICATION STATEMENT ON OMB PRA SUBMISSION FORM
Not applicable.

19. REASON FOR EMERGENCY SUBMISSION
See attached justification statement for more details.
Congress directed the Treasury in sections 424 and 806 of Public Law (P.L.) 108-357, the American Jobs Creation Act
of 2004, to study issues surrounding earnings stripping issues corporations use under section 163(j), Limitation on
deduction for interest on certain indebtedness. The Treasury subsequently found in November 2007, in the Report to
Congress on Earnings Stripping, Transfer Pricing and U.S. Income Tax Treaties (“the report”), that the most egregious
situation arises when a U.S. corporation converts to foreign corporation status.