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Notice

Proposed Collection; Comment Request for Form 1040 and Schedules A, B, C, C-EZ, D, D-1, E, EIC, F, H, J, R, and SE, Form 1040A, and Form 1040EZ, and All Attachments to These Forms

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AGENCY:

Internal Revenue Service (IRS), Treasury.

ACTION:

Notice and request for comments.

SUMMARY:

The Internal Revenue Service, as part of its continuing effort to reduce paperwork and respondent burden, invites the general public and other Federal agencies to take this opportunity to comment on proposed and continuing information collections, as required by the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13 (44 U.S.C. 3506(c)(2)(A)). This notice requests comments on all forms used by individual taxpayers: Form 1040, U.S. Individual Income Tax Return, and Schedules A, B, C, C-EZ, D, D-1, E, EIC, F, H, J, R, and SE; Form 1040A; Form 1040EZ; and all attachments to these forms (see the Appendix to this notice).

DATES:

Written comments should be received on or before May 27, 2010 to be assured of consideration.

ADDRESSES:

OIRA Desk Officer, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, oira_submission@omb.eop.gov.

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FOR FURTHER INFORMATION CONTACT:

Requests for additional information should be directed to Chief, RAS:R:FSA, NCA 7th Floor, Internal Revenue Service, 1111 Constitution Avenue, NW., Washington, DC 20224. mail to:

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SUPPLEMENTARY INFORMATION:

PRA Approval of Forms Used by Individual Taxpayers

Under the PRA, OMB assigns a control number to each “collection of information” that it reviews and approves for use by an agency. The PRA also requires agencies to estimate the burden for each collection of information. The burden estimates for each control number are displayed in (1) the PRA notices that accompany collections of information, (2) Federal Register notices such as this one, and (3) OMB's database of approved information collections.

The Individual Taxpayer Burden Model (ITBM) estimates burden experienced by individual taxpayers when complying with the Federal tax laws. The ITBM's approach to measuring burden focuses on the characteristics and activities of individual taxpayers in meeting their tax return filing compliance obligation. Key determinants of taxpayer burden in the model are the way the taxpayer prepares the return, e.g. with software or paid preparer, and the taxpayer's activities, e.g. recordkeeping and tax planning.

Burden is defined as the time and out-of-pocket costs incurred by taxpayers in complying with the Federal tax system. Time expended and out-of-pocket costs incurred are estimated separately. The methodology distinguishes among preparation methods, taxpayer activities, types of individual taxpayer, Start Printed Page 22180filing methods, and income levels. Indicators of tax law and administrative complexity as reflected in tax forms and instructions are incorporated in the model. The preparation methods reflected in the model are:

  • Self-prepared without software.
  • Self-prepared with software.
  • Used a paid preparer.

The types of taxpayer activities reflected in the model are:

  • Recordkeeping.
  • Form completion.
  • Form submission (electronic and paper).
  • Tax planning.
  • Use of services (IRS and paid professional).
  • Gathering tax materials.

The methodology incorporates results from a new individual taxpayer survey for TY 2007 and conducted in CY 2008 and CY 2009. (Prior survey for TY 1999 and TY 2000 were conducted in CY 2000 and CY 2001). The new survey results capture the significant gains in productivity associated with the usage of tax preparation software and tax preparation services and large shifts in the population away from self preparation by hand towards use of the assisted methods (paid preparers and tax software). Summary level results using this methodology are presented in the table below.

Taxpayer Burden Estimates

Time spent and out-of-pocket costs are estimated separately. Out-of-pocket costs include any expenses incurred by taxpayers to prepare and submit their tax returns. Examples of out-of-pocket costs include tax return preparation and submission fees, postage, tax preparation software costs, photocopying costs, and phone calls (if not toll-free).

Both time and cost burdens are national averages and do not necessarily reflect a “typical” case. For instance, the average time burden for all taxpayers filing a 1040, 1040A, or 1040EZ is estimated at 17.3 hours, with an average cost of $225 per return. This average includes all associated forms and schedules, across all preparation methods and all taxpayer activities. Taxpayers filing Form 1040 have an expected average burden of about 21.4 hours, and taxpayers filing Form 1040A and Form 1040EZ are expected to average about 8 hours. However, within each of these estimates, there is significant variation in taxpayer activity. Similarly, tax preparation fees vary extensively depending on the taxpayer's tax situation and issues, the type of professional preparer, and the geographic area.

The data shown are the best forward-looking estimates available as of November 12, 2009, for income tax returns filed for 2009. The estimates are subject to change as new data become available. The estimates include burden for activities up through and including filing a return but do not include burden associated with post-filing activities. However, operational IRS data indicate that electronically prepared and e-filed returns have fewer arithmetic errors, implying a lower associated post-filing burden.

Taxpayer Burden Model

The table below shows burden estimates by form type and type of taxpayer. Time burden is further broken out by taxpayer activity. The largest component of time burden for all taxpayers is recordkeeping, as opposed to form completion and submission. In addition, the time burden associated with form completion and submission activities is closely tied to preparation method (self-prepared without software, self-prepared with software, and prepared by paid preparer).

Proposed PRA Submission to OMB

Title: U.S. Individual Income Tax Return.

OMB Number: 1545-0074.

Form Numbers: Form 1040 and Schedules A, B, C, C-EZ, D, D-1, E, EIC, F, H, J, R, and SE; Form 1040A; Form 1040EZ; and all attachments to these forms (see the Appendix to this notice).

Abstract: These forms are used by individuals to report their income tax liability. The data is used to verify that the items reported on the forms are correct, and also for general statistics use.

Current Actions: The changes in aggregated compliance burden estimates can be explained in terms of three major components: Technical Adjustments, Statutory Changes, and Agency (IRS) Discretions.

Technical Adjustments

The largest adjustments are from the new survey data. The latest burden estimates are based on a new individual taxpayer survey for TY 2007 and conducted in CY 2008 and CY 2009. (Prior survey for TY 1999 and TY 2000 were conducted in CY 2000 and CY 2001). The new survey results capture the significant gains in productivity associated with the usage of tax preparation software and tax preparation services and large shifts in the population away from self preparation by hand towards use of the assisted methods (paid preparers and tax software).

The economic recession in the past year also has a significant impact on burden estimates, reducing the filing volume and resulting in lower time and money burdens.

The inclusion of Form 1040X has a significant positive impact on compliance burden estimates. The impact of including 1040X has actually out-weighted the impact of economic recession in terms of filing volume, but not in terms of burden changes (time and money). The burden associated with 1040X was not previously included in the aggregated burden estimates.

Statutory Changes

The primary drivers for the statutory changes are the American Recovery and Reinvestment Act (ARRA) of 2009 and related legislations.

IRS Discretions Changes

The IRS discretions changes include 1040X redesign, simplifications in filing Form 1099B/Schedule D/Form 1040, creation of Form 4506T-EZ, IRS support of the Free File Alliance, and changes to expand the eligibility of filing Form 3800 by individuals and businesses for general business credits. All these initiatives reduce time and money burdens for the taxpayers.

These changes have resulted in an overall decrease of 86,792,628 total hours in taxpayer burden previously approved by OMB.

Type of Review: Revision of currently approved collections.

Affected Public: Individuals or households.

Estimated Number of Respondents: 143,400,000.

Total Estimated Time: 2.431 billion hours (2,431,000,000 hours).

Estimated Time per Respondent: 17.3 hours.

Total Estimated Out-of-Pocket Costs: $31.43 billion ($31,543,000,000).

Estimated Out-of-Pocket Cost per Respondent: $225.

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.

Request for Comments

All comments will become a matter of public record. Comments are invited on: Start Printed Page 22181(a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency's estimate of the burden of the collection of information; (c) ways to enhance the quality, utility, and clarity of the information to be collected; (d) ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology; and (e) estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information.

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Robert Dahl,

Treasury Departmental Clearance Officer.

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Estimated Average Taxpayer Burden for Individuals by Activity

Primary form filed or type of taxpayerPercentage of returnsAverage time burden (hours)
Total timeRecordkeepingTax planningForm completionForm submissionAll otherAverage cost (dollars)
The average time and costs required to complete and file Form 1040, Form 1040A, Form 1040EZ, their schedules, and accompanying forms will vary depending on individual circumstances. The estimated averages are:
All taxpayers Primary forms filed10017.38.01.74.31.02.4$225
10407021.410.22.15.21.02.9280
1040A & 1040EZ Type of taxpayer308.02.70.82.30.81.396
Nonbusiness*6910.74.11.13.00.81.7129
Business*3131.916.53.07.11.24.0434
* You are considered a “business” filer if you file one or more of the following with Form 1040: Schedule C, C-EZ, E, or F or Form 2106 or 2106-EZ. You are considered a “nonbusiness” filer if you did not file any of those schedules or forms with Form 1040 or if you file Form 1040A or 1040EZ.

Appendix

FormsTitle
673Statement for Claiming Exemption from Withholding on Foreign Earned Income Eligible for the Exclusions Provided by Section 911.
926Return by a U.S. Transferor of Property to a Foreign Corporation.
970Application To Use LIFO Inventory Method.
972Consent of Shareholder To Include Specific Amount in Gross Income.
982Reduction of Tax Attributes Due To Discharge of Indebtedness (and Section 1082 Basis Adjustment).
1040U.S. Individual Income Tax Return.
1040 SCH AItemized Deductions.
1040 SCH BInterest and Ordinary Dividends.
1040 SCH CProfit or Loss From Business.
1040 SCH C-EZNet Profit From Business.
1040 SCH DCapital Gains and Losses.
1040 SCH D-1Continuation Sheet for Schedule D.
1040 SCH ESupplemental Income and Loss.
1040 SCH EICEarned Income Credit.
1040 SCH FProfit or Loss From Farming.
1040 SCH HHousehold Employment Taxes.
1040 SCH JIncome Averaging for Farmers and Fishermen.
1040 SCH LStandard Deduction for Certain Filers.
1040 SCH MMaking Work Pay and Government Retiree Credits.
1040 SCH RCredit for the Elderly or the Disabled.
1040 SCH SESelf-Employment Tax.
1040 AU.S. Individual Income Tax Return.
1040ES (NR)U.S. Estimated Tax for Nonresident Alien Individuals.
1040 ES/V-OCREstimated Tax for Individuals (Optical Character Recognition With Form 1040V).
1040 ES-OCR-VPayment Voucher.
1040 ES-OTCEstimated Tax for Individuals.
1040 EZIncome Tax Return for Single and Joint Filers With No Dependents.
1040 NRU.S. Nonresident Alien Income Tax Return.
1040 NR-EZU.S. Income Tax Return for Certain Nonresident Aliens With No Dependents.
1040 VPayment Voucher.
1040 XAmended U.S. Individual Income Tax Return.
1045Application for Tentative Refund.
1116Foreign Tax Credit.
1127Application for Extension of Time for Payment of Tax
1128Application To Adopt, Change, or Retain a Tax Year.
1310Statement of Person Claiming Refund Due a Deceased Taxpayer.
2106Employee Business Expenses.
2106 EZUnreimbursed Employee Business Expenses.
2120Multiple Support Declaration.
2210Underpayment of Estimated Tax by Individuals, Estates, and Trusts.
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2210 FUnderpayment of Estimated Tax by Farmers and Fishermen.
2350Application for Extension of Time To File U.S. Income Tax Return.
2350 SPSolicitud de Prórroga para Presentar la Declaración del Impuesto Personal sobre el Ingreso de los Estados Unidos.
2439Notice to Shareholder of Undistributed Long-Term Capital Gains.
2441Child and Dependent Care Expenses.
2555Foreign Earned Income.
2555 EZForeign Earned Income Exclusion.
2848Power of Attorney and Declaration of Representative.
3115Application for Change in Accounting Method.
3468Investment Credit.
3520Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.
3800General Business Credit.
3903Moving Expenses.
4029Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefits.
4070Employee's Report of Tips to Employer.
4070 AEmployee's Daily Record of Tips.
4136Credit for Federal Tax Paid on Fuels.
4137Social Security and Medicare Tax on Unreported Tip Income.
4255Recapture of Investment Credit.
4361Application for Exemption From Self-Employment Tax for Use by Ministers, Members of Religious Orders, and Christian Science Practitioners.
4562Depreciation and Amortization.
4563Exclusion of Income for Bona Fide Residents of American Samoa.
4684Casualties and Thefts.
4797Sales of Business Property.
4835Farm Rental Income and Expenses.
4852Substitute for Form W-2, Wage and Tax Statement or Form 1099-R, Distributions From Pension Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.
4868Application for Automatic Extension of Time To File Individual U.S. Income Tax Return.
4868 SPSolicitud de Prórroga Automática para Presentar la Declaración del Impuesto sobre el Ingreso Personal de los Estados Unidos.
4952Investment Interest Expense Deduction.
4970Tax on Accumulation Distribution of Trusts.
4972Tax on Lump-Sum Distributions.
5074Allocation of Individual Income Tax To Guam or the Commonwealth of the Northern Mariana Islands (CNMI).
5213Election To Postpone Determination as To Whether the Presumption Applies That an Activity Is Engaged in for Profit.
5329Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts.
5405First-Time Homebuyer Credit.
5471Information Return of U.S. Persons With Respect To Certain Foreign Corporations.
5471 SCH JAccumulated Earnings and Profits (E&P) of Controlled Foreign Corporation.
5471 SCH MTransactions Between Controlled Foreign Corporation and Shareholders or Other Related Persons.
5471 SCH OOrganization or Reorganization of Foreign Corporation, and Acquisitions and Dispositions of Its Stock.
5695Residential Energy Credits.
5713International Boycott Report.
5713 SCH AInternational Boycott Factor (Section 999(c)(1)).
5713 SCH BSpecifically Attributable Taxes and Income (Section 999(c)(2)).
5713 SCH CTax Effect of the International Boycott Provisions.
5754Statement by Person(s) Receiving Gambling Winnings.
5884Work Opportunity Credit.
6198At-Risk Limitations.
6251Alternative Minimum Tax—Individuals.
6252Installment Sale Income.
6478Credit for Alcohol Used as Fuel.
6765Credit for Increasing Research Activities.
6781Gains and Losses From Section 1256 Contracts and Straddles.
8082Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR).
8275Disclosure Statement.
8275 RRegulation Disclosure Statement.
8283Noncash Charitable Contributions.
8332Release of Claim to Exemption for Child of Divorced or Separated Parents.
8379Injured Spouse Claim and Allocation.
8396Mortgage Interest Credit.
8453U.S. Individual Income Tax Declaration for an IRS e-file Return.
8582Passive Activity Loss Limitations.
8582 CRPassive Activity Credit Limitations.
8586Low-Income Housing Credit.
8594Asset Acquisition Statement.
8606Nondeductible IRAs.
8609-AAnnual Statement for Low-Income Housing Credit.
8611Recapture of Low-Income Housing Credit.
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8615Tax for Certain Children Who Have Investment Income of More Than $1,800.
8621Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund.
8621-ALate Deemed Dividend or Deemed Sale Election by a Passive Foreign Investment Company.
8689Allocation of Individual Income Tax To the Virgin Islands.
8693Low-Income Housing Credit Disposition Bond.
8697Interest Computation Under the Look-Back Method for Completed Long-Term Contracts.
8801Credit for Prior Year Minimum Tax—Individuals, Estates, and Trusts.
8812Additional Child Tax Credit.
8814Parents' Election To Report Child's Interest and Dividends.
8815Exclusion of Interest From Series EE and I U.S. Savings Bonds Issued After 1989.
8818Optional Form To Record Redemption of Series EE and I U.S. Savings Bonds Issued After 1989.
8820Orphan Drug Credit.
8821Tax Information Authorization.
8822Change of Address.
8824Like-Kind Exchanges.
8826Disabled Access Credit.
8828Recapture of Federal Mortgage Subsidy.
8829Expenses for Business Use of Your Home.
8832Entity Classification Election.
8833Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b).
8834Qualified Electric Vehicle Credit.
8835Renewable Electricity and Refined Coal Production Credit.
8838Consent To Extend the Time To Assess Tax Under Section 367—Gain Recognition Statement.
8839Qualified Adoption Expenses.
8840Closer Connection Exception Statement for Aliens.
8843Statement for Exempt Individuals and Individuals With a Medical Condition.
8844Empowerment Zone and Renewal Community Employment Credit.
8845Indian Employment Credit.
8846Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips.
8847Credit for Contributions to Selected Community Development Corporations.
8853Archer MSAs and Long-Term Care Insurance Contracts.
8854Initial and Annual Expatriation Information Statement.
8858Information Return of U.S. Persons With Respect to Foreign Disregarded Entities.
8858 SCH MTransactions Between Controlled Foreign Disregarded Entity and Filer or Other Related Entities.
8859District of Columbia First-Time Homebuyer Credit.
8860Qualified Zone Academy Bond Credit.
8861Welfare-to-Work Credit.
8862Information to Claim Earned Income Credit After Disallowance.
8863Education Credits.
8864Biodiesel Fuels Credit.
8865Return of U.S. Persons With Respect To Certain Foreign Partnerships.
8865 SCH K-1Partner's Share of Income, Credits, Deductions, etc.
8865 SCH OTransfer of Property to a Foreign Partnership.
8865 SCH PAcquisitions, Dispositions, and Changes of Interests in a Foreign Partnership.
8866Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method.
8873Extraterritorial Income Exclusion.
8874New Markets Credit.
8878IRS e-file Signature Authorization for Form 4868 or Form 2350.
8878 SPAutorizacion de firma para presentar por medio del IRS e-file para el Formulario 4868(SP) o el Formulario 2350(SP).
8879IRS e-file Signature Authorization.
8879 SPAutorizacion de firma para presentar la Declaracion por medio del IRS e-file.
8880Credit for Qualified Retirement Savings Contributions.
8881Credit for Small Employer Pension Plan Startup Costs.
8882Credit for Employer-Provided Childcare Facilities and Services.
8885Health Coverage Tax Credit.
8886Reportable Transaction Disclosure Statement.
8888Direct Deposit of Refund to More Than One Account.
8889Health Savings Accounts (HSAs).
8891U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans
8896Low Sulfur Diesel Fuel Production Credit.
8898Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession.
8900Qualified Railroad Track Maintenance Credit.
8903Domestic Production Activities Deduction.
8906Distills Spirits Credit.
8907Nonconventional Source Fuel Credit.
8908Energy Efficient Home Credit.
8910Alternative Motor Vehicle Credit.
8911Alternative Fuel Vehicle Refueling Property Credit.
8915Qualified Hurricane Retirement Plan Distribution and Repayments.
8917Tuition and Fees Deduction.
8919Uncollected Social Security and Medicare Tax on Wages.
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8923Mining Rescue Team Training Credit.
8925Report of Employer-Owned Life Insurance Contracts
8930Qualified Disaster Recovery Assistance Retirement Plan Distributions and Repayments.
8931Agricultural Chemicals Security Credit.
8932Credit for Employer Differential Wage Payments.
8933Carbon Dioxide Sequestration Credit.
8936Qualified Plug-In Electric Drive Motor Vehicle Credit.
9465Installment Agreement Request.
9465 SPSolicitud para un Plan de Pagos a Plazos.
Notice 2006-52
Notice 160920-05Deduction for Energy Efficient Commercial Buildings.
Pub 972 TablesChild Tax Credit.
REG-149856-03Notice of Proposed Rulemaking Dependent Child of Divorced or Separated Parents or Parents Who Live Apart.
SS-4Application for Employer Identification Number.
SS-8Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding.
T (Timber)Forest Activities Schedules.
W-4Employee's Withholding Allowance Certificate.
W-4 PWithholding Certificate for Pension or Annuity Payments.
W-4 SRequest for Federal Income Tax Withholding From Sick Pay.
W-4 SPCertificado de Exencion de la Retencion del Empleado.
W-4 VVoluntary Withholding Request.
W-5Earned Income Credit Advance Payment Certificate.
W-5 SPCertificado del pago por adelantado del Credito por Ingreso del Trabajo.
W-7Application for IRS Individual Taxpayer Identification Number.
W-7 AApplication for Taxpayer Identification Number for Pending U.S. Adoptions.
W-7 SPSolicitud de Numero de Identicacion Personal del Contribuyente del Servicio de Impuestos Internos.
Forms Removed from this ICR:Reason for removal:
(1) Form 1040A, Schedule 1Obsolete.
(2) Form 1040A, Schedule 2Obsolete.
(3) Form 1040A, Schedule 3Obsolete.
(4) Form 8901Obsolete.
Forms Added to this ICR:Justification for Addition:
(1) Form 8923
(2) Form 8930Section 702(d) of P.L. 110-343 modifies IRC 1400Q.
(3) Form 8933Public Law 110-343, Division B, Title II, section 202 added Code section 45Q.
(4) Form 8936This new credit is pursuant to section 115 of Subtitle B of Title II of Division B of the Emergency Economic Stabilization Act of 2008 (P.L. 110-343) which added new Code section 45Q.
(5) 1040, Schedule LP.L. 111-5, Div B, sec. 1008
(6) 1040, Schedule MP.L. 111-5, sections 1001 and 2202 respectively.
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[FR Doc. 2010-9657 Filed 4-26-10; 8:45 am]

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