Sup Stat. (td 8383)

4

SUPPORTING STATEMENT

(TD 8383)

OMB # 1545-1209

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Section 7216 of the Internal Revenue Code of 1986 authorizes the disclosure or use of information by tax return preparers for purposes of quality or peer reviews. Section 7216 authorizes the issuance of regulations for guidance in this matter. Section 301.7206-2(p) contain a requirement that tax return preparers being reviewed will maintain a record of the review, include the information reviewed and the identity of the persons conducing the review.

2. USE OF DATA

The IRS will use the records kept by tax return preparers to monitor the quality and peer review programs.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

IRS Publications, Regulations, Notices and Letters are to be electronically enabled on an as practicable basis in accordance with the IRS Reform and Restructuring Act of 1998.

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

We have been unable to reduce the burden for small businesses, to the extent these proposed rules apply to them.

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

The requirements of §301.7206-2(p) were added by TD 8383 (December 27, 1991 @ 56 FR 66995).

A notice of proposed rulemaking was published simultaneously with temporary regulations on January 4, 2010, (75 FR 94, 75 FR 48). These temporary regulations were later removed and finalized by TD 9608 (December 28, 2012 @ 77 FR 76400).

We received no comments during the comment period in response to the Federal Register notice (79 FR 51227), dated August 27, 2014.

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

Not applicable.

10. ASSURANCE OF CONFIDENTIALITY OF RESPONSES

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

11 JUSTIFICATION OF SENSITIVE QUESTIONS

No personally identifiable information (PII) is collected.

12 ESTIMATED BURDEN OF INFORMATION COLLECTION

Section 301.7216-2(p) of the regulations contains the requirement that tax practitioners maintain a record of the quality or peer review including the information reviewed and identify the persons conducting the review. The burden estimate reflects the number of tax practitioners (attorneys, accountants, and enrolled agents) who may participate in the voluntary program of quality and peer reviews. It is estimated that 250,000 tax practitioners will maintain records relating to quality or peer reviews, and the average annual recordkeeping burden in 1 hour. The total annual burden is 250,000 hours.

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

As suggested by OMB, our Federal Register notice dated August 27, 2014, 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 response from taxpayers on this subject. As a result, estimates of the cost burdens are not available at this time.

14. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

Not applicable.

15. REASONS FOR CHANGE IN BURDEN

There is no change in the paperwork burden previously approved by OMB. We are making this submission to renew the OMB approval.

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 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

Not applicable.

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 26 U.S.C. 6103.