Form 14420 - Verification of Reported Income

Forms and Documents

Document Name	Status
Form 14420 Form 14420 - Verification of Reported Income Form	New
ombat1.doc Supplementary Document	2012-09-14
Supporting Statement.pdf Supporting Statement A	2012-10-05

IC Document Collections

IC ID	Document Title	Status
204043	Form 14420 - Verification of Reported Income Form	New

ICR Details

OMB Control No: 1545-2236	ICR Reference No: 201209-1545-007
Status: Historical Active	Previous ICR Reference No:
Agency/Subagency: TREAS/IRS	Agency Tracking No: Requesting Approval by 10-8-12
Title: Form 14420 - Verification of Reported Income
Type of Information Collection: New collection (Request for a new OMB Control Number)	Common Form ICR:  No
Type of Review Request: Emergency	Approval Requested By: 10/08/2012
OIRA Conclusion Action: Approved without change	Conclusion Date: 10/19/2012
	Date Received in OIRA: 10/05/2012
Terms of Clearance:

	Inventory as of this Action	Requested	Previously Approved
Expiration Date	04/30/2013	6 Months From Approved
Responses	5,600	0	0
Time Burden (Hours)	22,400	0	0
Cost Burden (Dollars)	0	0	0

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Abstract: In 2009, legislation was passed requiring payment card processors to file Forms 1099-K reporting payment card transactions for businesses who accept this form of payment. The IRS is launching pilots aimed at determining the best method for and the value of using the 1099-K information to identify and treat non-compliant taxpayers. Notices are sent to taxpayers who have been identified as potential underreporters. The notices inform them that their return has been selected for further inquiry since the portion of their reported gross receipts attributable to 1099-K card payments appear atypically large, which may suggest potential underreporting of non-card payments (e.g. cash). Taxpayers are requested to fill out this form to correct for 1099-K data errors and provide additional information that may explain their outlier figures.

Emergency Justfication: In 2009, legislation was passed requiring payment card processors to file Forms 1099-K reporting payment card transactions for businesses who accept this form of payment. The IRS is launching pilots aimed at determining the best method for and the value of using the 1099-K information to identify and treat non-compliant taxpayers. This is expected to result in many new cases, and as a consequence the pilot will also test new treatment streams - one of which is a notice process requiring taxpayers to complete this form. Pilots are scheduled for launch on November 12th. The pilot studies commence November 12, 2012. Delaying the approval of this Form 14420 delays execution of those pilots. Pilots are designed for dherence to the legislation for Payment Card Reporting and Basis Reporting which was passed in 2009. The Form 14420 will provide invaluable data based on the law implementation with the 2011 Tax Year and those filings have been received. The pilots would put the Service in the position of not being able to address potential compliance issues timely and miss the opportunity to communicate any findings prior to the next filing season.

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Authorizing Statute(s): US Code: 26 USC 6050W Name of Law: Returns Relating to Payments Made In Settlement of Payment
  

Citations for New Statutory Requirements: None

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Associated Rulemaking Information
RIN:	Stage of Rulemaking:	Federal Register Citation:	Date:
	Not associated with rulemaking

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Federal Register Notices & Comments

Did the Agency receive public comments on this ICR? No

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Number of Information Collection (IC) in this ICR: 1

IC Title	Form No.	Form Name
Form 14420 - Verification of Reported Income	14420	Verification of Reported Income

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ICR Summary of Burden

	Total Approved	Previously Approved	Change Due to New Statute	Change Due to Agency Discretion	Change Due to Adjustment in Estimate	Change Due to Potential Violation of the PRA
Annual Number of Responses	5,600	0	0	5,600	0	0
Annual Time Burden (Hours)	22,400	0	0	22,400	0	0
Annual Cost Burden (Dollars)	0	0	0	0	0	0

Burden increases because of Program Change due to Agency Discretion: Yes

Burden Increase Due to: Miscellaneous Actions

Burden decreases because of Program Change due to Agency Discretion: No

Burden Reduction Due to:

Short Statement: In 2009, legislation was passed requiring payment card processors to file Forms 1099-K reporting payment card transactions for businesses who accept this form of payment. The IRS is launching pilots aimed at determining the best method for and the value of using the 1099-K information to identify and treat non-compliant taxpayers. Form 14420 is being created to help gather the appropriate information. We estimate that the creation of this form will result in a annual burden increase of 5,600 responses and 22,400 hours.

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Annual Cost to Federal Government: $0

Does this IC contain surveys, censuses, or employ statistical methods? No

Is the Supporting Statement intended to be a Privacy Impact Assessment required by the E-Government Act of 2002? No

Is this ICR related to the Affordable Care Act [Pub. L. 111-148 & 111-152]? No

Is this ICR related to the Dodd-Frank Wall Street Reform and Consumer Protection Act, [Pub. L. 111-203]? No

Is this ICR related to the American Recovery and Reinvestment Act of 2009 (ARRA)? No

Is this ICR related to the Pandemic Response? Uncollected

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Common Form ICR:  No

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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:

(a) It is necessary for the proper performance of agency functions;

(b) It avoids unnecessary duplication;

(c) It reduces burden on small entities;

(d) It uses plain, coherent, and unambiguous language that is understandable to respondents;

(e) Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

(f) It indicates the retention periods for recordkeeping requirements;

(g) It informs respondents of the information called for under 5 CFR 1320.8 (b)(3) about:

(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;

(h) It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to be collected.

(i) It uses effective and efficient statistical survey methodology (if applicable); and

(j) It makes appropriate use of information technology.

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.

Certification Date: 10/05/2012

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