The revenue procedure provides for determining when statistical sampling may be used for purposes of section 199, which provides a deduction for income attributable to domestic production activities, and establishes acceptable statistical sampling methodologies. The collection of information in the proposed revenue procedure involves a recordkeeping requirement for taxpayer that use statistical sampling under section 199.
We are requesting emergency review of this submission and seek OMB approval by April 2, 2007. Section 199 was added to the Internal Revenue Code by section 102 of the American Jobs Creation Act of 2004 (Public Law 108-357), and amended by section 403(a) of the Gulf Opportunity Zone Act of 2005 (Public Law 109-135), section 514 of the Tax Increase Prevention and Reconciliation Act of 2005 (Public Law 109-222), and section 401 of the Tax Relief and Health Care Act of 2006 (Public Law 109-432). Section 199 is a complex tax provision requiring taxpayers, particular large corporate taxpayers with multiple businesses and subsidiaries, to make very complicated calculations.
The IRS published proposed regulations in the Federal Register on November 4, 2005 (70 FR 67220). The proposed regulations state that certain large taxpayers may use statistical sampling for §199 purposes. The proposed regulations and final regulations published in the Federal Register on June 1, 2006 (71 FR 31268) do not provide specific rules on the use of statistical sampling for §199 purposes. The proposed revenue procedure provides statistical sampling rules and many large corporate taxpayers have told the IRS that they will use statistical sampling for their 2006 tax returns. Without statistical sampling, taxpayers may forgo the benefit of §199 due to the tremendous cost of complying with the provision. Publication of the proposed revenue procedure later in 2007 will limit the availability of statistical sampling for 2006 returns. Furthermore, taxpayers have expressed a pressing need for guidance in this area in order to comply with their financial reporting obligations under FIN 48 which is generally required to be implemented by publicly traded companies in the first quarter of 2007. Therefore, we respectfully request that the consideration of this submission and provision of an OMB number be completed by April 2, 2007. Any other result will be detrimental to the taxpaying public and will interfere with the mission of the IRS.
US Code:
26 USC 6103
Name of Law: Confidentiality and disclosure of returns and return
US Code:
18 USC 2257
Name of Law: Record keeping requirements
PL:
Pub.L. 108 - 357 102
Name of Law: American Jobs Creation Act of 2004
PL:
Pub.L. 109 - 222 514
Name of Law: Tax Increase Prevention and Reconciliation Act of 2005
PL:
Pub.L. 109 - 432 401
Name of Law: An act to amend the Internal Revenue Code of 1986 to extend expiring provisions, and for other purpo
On behalf of this Federal agency, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9 and the related provisions of 5 CFR 1320.8(b)(3).
The following is a summary of the topics, regarding the proposed collection of information, that the certification covers:
(i) Why the information is being collected;
(ii) Use of information;
(iii) Burden estimate;
(iv) Nature of response (voluntary, required for a benefit, or mandatory);
(v) Nature and extent of confidentiality; and
(vi) Need to display currently valid OMB control number;
If you are unable to certify compliance with any of these provisions, identify the item by leaving the box unchecked and explain the reason in the Supporting Statement.
Supporting Statement [RP-144921-06].doc
RP-144921-06, Statistical Sampling for purposes of Section 199