[Federal Register Volume 79, Number 83 (Wednesday, April 30, 2014)]
[Notices]
[Pages 24498-24508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-09819]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service


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

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice and request for comments.

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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, E, EIC, F, H, J, R, and SE; Form 1040A; 
Form 1040EZ; Form 1040NR; Form 1040NR-EZ; Form 1040X; and all 
attachments to these forms (see the Appendix to this notice).

DATES: Written comments should be received on or before May 30, 2014 to 
be assured of consideration.

ADDRESSES: Direct all written comments to Office of Information and 
Regulatory Affairs, Office of Management and Budget, Attention: Desk 
Officer for Treasury, New Executive Office Building, Room 10235, 
Washington, DC 20503, or email at [email protected] and (2) 
Treasury PRA Clearance Officer, 1750 Pennsylvania Ave. NW., Suite 8140, 
Washington, DC 20220, or email at [email protected].

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. Burden estimates for each control number are displayed 
in (1) PRA notices that accompany collections of information, (2) 
Federal Register notices such as this one, and (3) OMB's database of 
approved information collections.

Taxpayer Burden Model

    The Individual Taxpayer Burden Model (ITBM) estimates burden 
experienced by individual taxpayers when complying with Federal tax 
laws and incorporates results from a survey of tax year 2011 individual 
taxpayers, conducted in 2012 and 2013. The approach to measuring burden 
focuses on the characteristics and activities undertaken by individual 
taxpayers in meeting their tax return filing obligations.
    Burden is defined as the time and out-of-pocket costs incurred by 
taxpayers in complying with the Federal tax system and are estimated 
separately. Out-of-pocket costs include any expenses incurred by 
taxpayers to prepare and submit their tax returns. Examples include tax 
return preparation fees, the purchase price of tax preparation 
software, submission fees, photocopying costs, postage, and phone calls 
(if not toll-free).
    The methodology distinguishes among preparation method, taxpayer 
activities, taxpayer type, filing method, and income level. Indicators 
of tax law and administrative complexity, as reflected in the tax forms 
and instructions, are incorporated into the model.
    Preparation methods reflected in the model are as follows:
     Self-prepared without software,
     Self-prepared with software, and
     Use of a paid preparer or tax professional.
    Types of taxpayer activities reflected in the model are as follows:
     Recordkeeping,
     Tax planning,
     Gathering tax materials,
     Use of services (IRS and other),
     Form completion, and
     Form submission.

Taxpayer Burden Estimates

    Summary level results using this methodology are presented in Table 
1 below. The data shown are the best forward-looking estimates 
available for income tax returns filed for tax year 2013.
    Table 1 shows burden estimates based on current statutory 
requirements as of November 21, 2013 for taxpayers filing a 2013 Form 
1040, 1040A, or 1040EZ tax return. Time spent and out-of-pocket costs 
are presented separately. Time burden is broken out by taxpayer 
activity, with record keeping representing the largest component. Out-
of-pocket costs include any expenses incurred by taxpayers to prepare 
and submit their tax returns. Examples include tax return preparation

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and submission fees, postage and photocopying costs, and tax 
preparation software costs. While these estimates do not include burden 
associated with post-filing activities, IRS operational data indicate 
that electronically prepared and filed returns have fewer arithmetic 
errors, implying lower post-filing burden.
    Reported time and cost burdens are national averages and do not 
necessarily reflect a ``typical'' case. Most taxpayers experience lower 
than average burden, with taxpayer burden varying considerably by 
taxpayer type. For instance, the estimated average time burden for all 
taxpayers filing a Form 1040, 1040A, or 1040EZ is 12 hours, with an 
average cost of $210 per return. This average includes all associated 
forms and schedules, across all preparation methods and taxpayer 
activities. The average burden for taxpayers filing Form 1040 is about 
15 hours and $280; the average burden for taxpayers filing Form 1040A 
is about 7 hours and $90; and the average for Form 1040EZ filers is 
about 4 hours and $30.
    Within each of these estimates there is significant variation in 
taxpayer activity. For example, non-business taxpayers are expected to 
have an average burden of about 7 hours and $120, while business 
taxpayers are expected to have an average burden of about 24 hours and 
$430. Similarly, tax preparation fees and other out-of-pocket costs 
vary extensively depending on the tax situation of the taxpayer, the 
type of software or professional preparer used, and the geographic 
location.

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; Form 1040NR; Form 
1040NR-EZ, Form 1040X; 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 statistical 
use.
    Current Actions: The change in estimated aggregate compliance 
burden can be explained by three major sources--technical adjustments, 
statutory changes, and discretionary agency (IRS) actions.
    Technical Adjustments--The largest adjustments are from 
incorporation of updated tax return data, macroeconomic data, and 
survey data as well as refinements in the estimation methodology. 
Updating the FY13 macroeconomic data and incorporating new tax return 
data lead to the largest technical adjustments. The impact of each 
technical adjustment can be seen below.

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                                                                   Change in                        Change in
                                                                    filers      Change in time       dollars
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Updated FY13 Macroeconomic Data...............................      -3,100,000     -32,000,000      -762,000,000
Updated Tax Return Data.......................................               0     -53,000,000    -1,486,000,000
Updated Survey Data...........................................               0       6,000,000     1,063,000,000
FY14 Population Estimates.....................................       1,700,000       4,000,000       908,000,000
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    Statutory Changes--The primary drivers of the statutory changes are 
the phaseout of itemized deductions (American Taxpayer Relief Act of 
2012), the Net Investment Income Tax (Health Care and Education 
Reconciliation Act of 2010), and the Additional Medicare Tax (Patient 
Protection and Affordable Care Act of 2010). The estimated impact of 
these items is as follows:

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                                                                     Expected        Change in       Change in
                                                                      filers           hours          dollars
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Phaseout of Itemized Deductions.................................       2,300,000        <500,000      21,000,000
Net Investment Income Tax.......................................       2,800,000       4,000,000     202,000,000
Additional Medicare Tax.........................................       3,100,000       3,000,000     129,000,000
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    IRS Discretionary Changes--Introduction of the Office in the Home 
Safe Harbor impacts approximately 600,000 filers and decreases time by 
1,600,000 hours (rounded to 2,000,000 hours) and money by $7,000,000. 
All other IRS discretionary changes had a negligible impact on taxpayer 
burden.
    Total--Taken together, the changes discussed above have decreased 
total hours by 69,000,000 hours and increased total dollars by 
68,000,000.
    Type of Review: Revision of currently approved collections.
    Affected Public: Individuals or households.
    Estimated Number of Respondents: 152,900,000.
    Total Estimated Time: 1.855 billion hours (1,855,000,000 hours).
    Estimated Time per Respondent: 12.13 hours.
    Total Estimated Out-of-Pocket Costs: $31.717 billion 
($37,717,000,000).
    Estimated Out-of-Pocket Cost per Respondent: $207.
    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 content 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

    Comments submitted in response to this notice will be summarized 
and/or included in the request for OMB approval. All comments will 
become a matter of public record. Comments are invited on: (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

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technology; and (e) estimates of capital or start-up costs and costs of 
operation, maintenance, and purchase of services to provide 
information.

    Approved on April 25, 2014.
Robert Dahl,
Treasury Departmental Clearance Officer.
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[FR Doc. 2014-09819 Filed 4-29-14; 8:45 am]
BILLING CODE 4830-01-P