2020 Supporting Statement (Form 8933) (1545-2132)

SUPPORTING STATEMENT

Internal Revenue Service

(Form 8933)

OMB # 1545-2132

1. CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Satisfaction of requirements to qualify for a tax credit for purposes of section 45Q of the Internal Revenue Code (Code) and §§ 1.45Q-1 through 1.45Q-5 of the Income Tax Regulations (26 CFR Part I). The information will be collected on Form 8933, Carbon Dioxide Sequestration Credit, was developed to carry out the provisions of new Code section 45Q. This new section was added by section 115 (Division B) of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343). This credit is available for qualified carbon dioxide captured after October 3, 2008, at a qualified facility and disposed of in secure geological storage or used as a tertiary injectant in a qualified enhanced oil or natural gas recovery project.

2. USE OF DATA

Form 8933 will provide a standardized format to claim this credit to an eligible person that captures, after October 3, 2008, qualified carbon dioxide at a qualified facility and physically or contractually ensures the disposal of or the use as a tertiary injectant of the qualified carbon dioxide.

3. USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

Electronic filing for this form is not practical because Form 8933 is filed as a PDF attachment to another form.

4. EFFORTS TO IDENTIFY DUPLICATION

Taxpayers may use existing EPA reports for Class II and/or Class VI wells or ISO 27916:2019 reporting to satisfy the information collection requirement. The information obtained through this collection is unique and is not already available for use or adaptation from another source.

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

Small businesses and other entities may use existing agreements to meet the information collection requirement. Small entities are affected in that they’ll have to use the form if they want to receive the credit.

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

Less frequent collection would result in a significant compliance burden when taxpayers are under examination by the IRS. If the IRS did not collect this information, the IRS would not be able to standardize a format to claim credit for eligible persons that captures qualified carbon dioxide at a qualified facility and therefore would not be able to physically or contractually ensures the disposal of or the use as a tertiary injectant of the qualified carbon dioxide.

1. 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).

7. 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 8933.

On June 2, 2020 IRS published a Notice of Proposed Rulemaking, Credit for Carbon Oxide Sequestration (RIN 1545-BP42), in the Federal Register at 85 FR 34050.

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

No payment or gift has been provided to any respondents.

7. ASSURANCE OF CONFIDENTIALITY OF RESPONSES

The information collection is only required to be maintained by the taxpayer and is not required to be disclosed to the IRS unless a taxpayer is under examination. Generally, tax returns and tax return information are confidential as required by 26 USC 6103.

7. JUSTIFICATION OF SENSITIVE QUESTIONS

No personally identifiable information (PII) is collected.

7. ESTIMATED BURDEN OF INFORMATION COLLECTION

Authority	Description	# of Respondents	# Responses per Respondent	Annual Responses	Hours per Response	Total Burden
	Form 8933	100	1	100	2.15	215
Totals		100		100		215

Form 8933 is used by individuals, households, estates and trusts.  The estimate of burden that is being reported under 1545-2132 reports only the burden imposed on estates and trusts.  The portion of the burden imposed on individuals and households are approved and reported under OMB Control Number 1545-0074. The burden associated with the business filers are being reported under OMB Control Number 1545-0123.

7. ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

To ensure more accuracy and consistency across its information collections, IRS is currently in the process of revising the methodology it uses to estimate burden and costs. Once this methodology is complete, IRS will update this information collection to reflect a more precise estimate of burden and costs.

7. ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

Product	Aggregate Cost per Product (factor applied)		Printing and Distribution		Government Cost Estimate per Product
Form 8933	32,807				32,807
Form Instructions
Grand Total	32,807				32,807
Table costs are based on 2018 actuals obtained from IRS Chief Financial Office and Media and Publications
* New product costs will be included in the next collection update.

7. REASONS FOR CHANGE IN BURDEN

Program change allowing certainty to taxpayers to claim the tax credit for purposes of section 45Q. The program change will not affect the burden estimates.

16. PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION

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

17. REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE

IRS believes 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 OMB approval and obtain a new expiration date before the old one expires.

18. EXCEPTIONS TO THE CERTIFICATION STATEMENT

There are no exceptions to the certification statement.

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.

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