Supporting Statement (Form-8946)

SUPPORTING STATEMENT
1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
In order to get a Preparer Tax Identification Number (PTIN), a person must establish their identity. Most individuals
applying for a PTIN have a social security number, and will provide that number as part of the application process.
However, foreign persons that cannot get a social security number will not have a social security number to provide.
Form 8946 is being created to enable those foreign persons to provide the necessary information and documentation
that will be provided to establish their identity in lieu of providing a social security number.

2. USE OF DATA
The information is needed to establish the identity of nonresident aliens who cannot get a social security number.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
Since identity documents must be submitted with this form, the form must be mailed in. The required documents
cannot be submitted electronically.

4. EFFORTS TO IDENTIFY DUPLICATION
A PTIN is a unique number. Under guidance from regulation 134235-08, applicants are required to provide originals or
certified copies of orignal document with their application to establish their identity. The agency cannot use any
information that already exist in an electronic format. All efforts have been made to identify and eliminate duplication.

5. METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES
Not applicable.

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

Form 14029 (Rev. 4-2009) Catalog Number 51944B Page 4

Department of the Treasury–Internal Revenue Service

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 8946.

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 USC 6103.

11. JUSTIFICATION OF SENSITIVE QUESTIONS
Not applicable

12. ESTIMATED BURDEN OF INFORMATION COLLECTION
We expect to receive 20,000 responses. We expect the response time per response to be 10.06 hours. Therefore, we
expect the total hours to be 201,200.
Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time.

Form 14029 (Rev. 4-2009) Catalog Number 51944B

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Department of the Treasury–Internal Revenue Service

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
The primary cost to the government consists of the cost of printing Form 8945. We estimate the cost of printing the
form to be 10,000

15. REASONS FOR CHANGE IN BURDEN
Not applicable.

16. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION
Not applicable.

17. 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 statutes/regulation sunsets as of the expiration date. Taxpayers are not likely to be aware
that the Service intends to request renewal of OMB approval and obtain a new expiration date before the old one
expires.

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

19. REASON FOR EMERGENCY SUBMISSION
Paid preparers will be required to enter their PTIN on returns they are paid to prepare that are filed after 12/31/2010.
We need to have this form available by September 1, 2010, so foreign persons can complete it in time to receive the
PTIN that they will be required to enter on the return.

Form 14029 (Rev. 4-2009) Catalog Number 51944B

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Department of the Treasury–Internal Revenue Service

Emergency approval of a collection of information is requested by the Commissioner of Internal
Revenue under 44 U.S.C § 3507(j)(1) for Form-8946. Form-8946 is created as one of several
“Information Collection Instruments” for an already approved collection under OMB 1545-2176
guided by the Notice of Proposed Rulemaking REG-134235-08 (attached as a Supplementary
Document). In order to obtain a Preparer Tax Identification Number (PTIN), a person must
establish their identity. Most individuals applying for a PTIN have a social security number, and
will provide that number as part of the application process. However, Paid Preparers that are
nonresident aliens and cannot get a social security number will need to establish their identity
prior to getting a PTIN. These Paid Preparers will use Form-8946 as a vehicle for establishing
their identity in lieu of providing a social security number.
The Form-8946 is primarily created as the Information Collection Instrument for the collection of
information under REG-134235-08. The purpose is to address the problem of the Internal
Revenue Service’s inability to accurately identify all tax return preparers and more significantly
the problem of inaccurate identification of tax returns and claims for refund of tax.
New regulations specifically require tax return preparers to apply for and regularly renew a PTIN
at the time and in the manner the IRS prescribes, including the payment of a user fee. IRS
regulations provide that tax return preparers must, as prescribed by the IRS in forms, instructions,
or other guidance, furnish a preparer tax identification number (PTIN) on tax returns and claims
for refund of tax. Tax return preparers will be required to use a PTIN on tax returns and claims for
refund filed after December 31, 2010. Current regulations allow tax return preparers to furnish
either their social security number or a PTIN as the preparer’s identifying number on tax returns
and claims for refund. The option to use more than one identifying number, and the fact that not
all tax return preparers reliably use the same identifying number (i.e., a tax return preparer may
use an SSN on some tax returns and claims for refund, and use a PTIN on other tax returns and
refund claims), inhibits the IRS’s accurate identification of tax return preparers and the tax returns
and claims for refund they prepare.
As explained below, all of the requirements 44 U.S.C. § 3507(j)(1)(A)(i),(5 CFR Part 1320 §
1320.13) for Emergency Processing are satisfied. The collection of information falls within both
prongs of section 3507(j)(1)(A)(i).
First, as required by section 3507(j)(1)(A)(i), the collection of information is needed prior to the
expiration of the normal clearance period (approximately January 2010).
The IRS conducted an extensive review in 2009 of paid tax return preparers and tax return
preparation. The review concluded that obtaining more compete and accurate information on
individual tax return preparers and improved IRS oversight of tax return preparers and their
preparation of tax returns and claims for refund is necessary for effective tax administration. See
IRS Publication 4832 Return Preparer Review (Dec. 2009).
Establishing a requirement that tax return preparers obtain and consistently use a single
identifying number issued by the IRS is fundamental to better oversight of tax return preparers. It
is also the requisite first step to: (1) prescribing procedures for tax return preparers to register
with the IRS, including procedures for personal and business tax-compliance checks of tax return
preparers; (2) authorizing registered tax return preparers to represent taxpayers before the IRS
(and be subject to the rules of practice in Circular 230).
While REG-13423508 is authorization to collect the information to allow the IRS to
complete its development and implementation of systems for tax return preparers to apply
for and be issued a PTIN, Form-8946 is one of several instruments by which to collect the
information. The operational date for a new system to apply for a PTIN and register as a

tax return preparer is September 1, 2010. Completion must be sufficiently in advance of
the proposed effective date to allow a PTIN to be assigned to all tax return preparers who
need one for use on tax returns and claims for refund filed after December 31, 2010.
Therefore, Form-8946 must be made available to the public by September 1, 2010.
Second, as required by section 3507(j)(1)(A)(ii), the collection of information is essential to the
IRS’s mission of administering the internal revenue laws and furthering tax compliance.
Tax return preparers and tax return preparation have a significant effect on taxpayer education,
tax compliance, and IRS operations. As already described, Form-8946 is needed as part of the
IRS’s efforts to better monitor tax return preparers and their preparation of tax returns, which
directly depends on accurate identification by means of a single, IRS-generated identifying
number for each tax return preparer.
Pursuant to section 3507(j)(1)(B), the IRS cannot reasonably comply with the nonemergency
procedures of section 3507. Section 3507(j)(1)(B) sets forth three criteria, at least one of which
must apply: (i) public harm is reasonably likely to result if normal clearance procedures are
followed; (ii) an unanticipated event has occurred; or (iii) the use of normal clearance procedures
is reasonably likely to cause a statutory or court-ordered deadline to be missed.
Tax return preparers prepare a considerable number of the tax returns that are filed with the IRS.
Consequently, tax return preparers have a significant effect on the correctness of filed tax returns.
Taxpayers who hire tax return preparers to prepare their tax returns and the public in general
have an interest in proper tax return preparation and in regulation of preparers and their
preparation activities. Incorrect tax returns can result in penalties and interest for taxpayers, lost
revenue, and added administrative costs to the IRS for examination of tax returns and collection
of unreported or unpaid liabilities.
The vast majority of individual income tax returns are filed during the annual filing season
between late January and April 15th. In order for the new process to apply for a PTIN to
commence September 1, 2010 and for foreign persons (without a social security number) to
timely secure a PTIN for the next filing season (January – April 2011), the approval of the
collection of Information Collection Instrument (Form-8946) is needed as quickly as possible and
before it would ordinarily be granted under the standard procedures. Delaying the availability of
Form-8946 until the 2012 filing season is reasonably likely to cause public harm.