Proposed Collection; Comment Request for U.S. Employment Tax Returns and Related Forms; Forms CT-1, CT-1X, CT-2, SS-8, SS-8 (PR), W-2, W-2 AS, W-2 C, W-2 GU, W-2 VI, W-3, W-3 (PR), W-3 C, W-3 C (PR), W-3 SS, 940, 940 (PR), 940 SCH A, 940 SCH A (PR), 940 SCH R, 941, 941 (PR), 941 SCH B, 941 SCH B (PR), 941 SCH D, 941 SCH R, 941 SS, 941 X, 941 X (PR), 943, 943 (PR), 943 A, 943 A (PR), 943 SCH R, 943 X, 943 X (PR), 944, 944 X, 945, 945 A, 945 X, 2032, 2678, 8027, 8027 T, 8453 EMP, 8879 EMP, 8922, 8952, and 8974

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/or continuing information collections, as required by the Paperwork Reduction Act of 1995 (PRA). The IRS is soliciting comments on U.S. Employment Tax Returns and related Forms.

DATES:

Written comments should be received on or before September 30, 2019 to be assured of consideration.

ADDRESSES:

Direct all written comments to Laurie Brimmer, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224.

FOR FURTHER INFORMATION CONTACT:

Requests for additional information or copies of the form and instructions should be directed to Kerry Dennis, at (202) 317-5751, Internal Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC 20224, or through the internet, at Kerry.Dennis@irs.gov .

SUPPLEMENTARY INFORMATION:

Today, over 70 percent of all employment tax returns are prepared using software or with preparer assistance. In this environment, in which many taxpayers' activities are no longer as directly associated with particular forms, estimating burden on a form-by-form basis is not an appropriate measurement of taxpayer burden.

There are 50 employment tax related forms used by 7,000,000 taxpayers. These include Forms CT-1, CT-1X, CT-2, SS-8, SS-8 (PR), W-2, W-2 AS, W-2 C, W-2 GU, W-2 VI, W-3, W-3 (PR), W-3 C, W-3 C (PR), W-3 SS, 940, 940 (PR), 940 SCH A, 940 SCH A (PR), 940 SCH R, 941, 941 (PR), 941 SCH B, 941 SCH B (PR), 941 SCH D, 941 SCH R, 941 SS, 941 X, 941 X (PR), 943, 943 (PR), 943 A, 943 A (PR), 943 SCH R, 943 X, 943 X (PR), 944, 944 X, 945, 945 A, 945 X, 2032, 2678, 8027, 8027 T, 8453 EMP, 8879 EMP, 8922, 8952, and 8974.

Related Internal Revenue Service and The Department of Treasury Guidance:

26 CFR 31.6001-1 Records in general; 26 CFR 31.6001-2 Additional Records under FICA; 26 CFR 31.6001-3, Additional records under Railroad Retirement Tax Act; 26 CFR 31.6001-5 Additional records

Tip Reporting Alternative Commitment (TRAC) Agreement for Use in the Cosmetology and Barber Industry to Employment Tax

Reg-111583-07(TD 9405)(Final)—Employment Tax Adjustments; REG-130074-11—Rules Relating to Additional Medicare Tax

For most of these collections, IRS has in the past obtained separate OMB approvals under unique OMB Control Numbers and separate burden estimates. With this notice, the IRS is announcing significant changes to (1) the manner in which tax forms used by employers will be approved under the PRA and (2) its method of estimating the paperwork burden imposed on all employers.

Tax Compliance Burden

Tax compliance burden is defined as the time and money taxpayers spend to comply with their tax filing responsibilities. Time-related activities include recordkeeping, tax planning, gathering tax materials, learning about the law and what you need to do, and completing and submitting the return. Out-of-pocket costs include expenses such as purchasing tax software, paying a third-party preparer, and printing and postage. Tax compliance burden does not include a taxpayer's tax liability, economic inefficiencies caused by sub-optimal choices related to tax deductions or credits, or psychological costs. The TCBM estimates the aggregate burden imposed on business taxpayers, based upon their tax-related characteristics and activities. IRS therefore will seek OMB approval of all 50 Employment Tax forms as a single “collection of information.” The aggregate burden of these tax forms will be accounted for under OMB Control Number 1545-0029, which is currently assigned to Form 941, 941-PR, 941-SS, 941-X, 941-X(PR), Schedule B (Form 941), Schedule B (Form 941-PR), Schedule R (Form 941), 941-SS-V, 941-V, 941-X, 941-X(PR) and its related schedules. OMB Control Number 1545-0029 will be displayed on all employment-tax forms and other related information collections. As a result, employment tax burden-related estimates will be displayed differently in PRA Notices on tax forms and other information collections, and in Federal Register notices. This way of displaying burden is presented below under the heading “Proposed PRA Submission to OMB.” For more information about tax compliance burden and the TBM, go to the article “Tax Compliance Burden” posted on the IRS website at https://www.irs.gov/pub/irs-soi/d13315.pdf.

Taxpayer Burden Estimates

The estimates are subject to change as new forms and data become available.

Proposed PRA Submission to OMB

Title: U.S. Employment Tax Returns and related Forms.

OMB Number: 1545-0029.

Form Numbers: Forms CT-1, CT-1X, CT-2, SS-8, SS-8 (PR), W-2, W-2 AS, W-2 C, W-2 GU, W-2 VI, W-3, W-3 (PR), W-3 C, W-3 C (PR), W-3 SS, 940, 940 (PR), 940 SCH A, 940 SCH A (PR), 940 SCH R, 941, 941 (PR), 941 SCH B, 941 SCH B (PR), 941 SCH D, 941 SCH R, 941 SS, 941 X, 941 X (PR), 943, 943 (PR), 943 A, 943 A (PR), 943 SCH R, 943 X, 943 X (PR), 944, 944 X, 945, 945 A, 945 X, 2032, 2678, 8027, 8027 T, 8453 EMP, 8879 EMP, 8922, 8952, and 8974.

Abstract: These forms are used by employers to report their employment tax related activity. The data is used to verify that the items reported on the forms are correct.

Current Actions: The burden estimation methodology for employment tax is being transitioned from the legacy ADL model to the Taxpayer Burden Model. The changes discussed above result in a burden hour estimate of 575,000,000 hours, a decrease in total estimated time burden of 53,519,249 hours. The newly-reported total out-of-pocket costs is $15,030,000,000 and total monetized burden is $25,200,000,000. These changes are solely related to the transition of the burden estimate from the legacy Arthur D. Little Model methodology to the RAAS Taxpayer Burden Model. This is a one-time change.

Type of Review: Revision of currently approved collections.

Estimates Total Time (Hours): 575,000,000.

Estimated Total Out-of-Pocket Costs: $15,030,000,000.

Estimated Total Monetized Burden: $25,200,000,000.

Affected Public: Employers.

Estimated Number of Respondents: 7,000,000.

Total Estimated Time: 575,000,000 hours.

Estimated Time Per Respondent: 82 hours.

Total Estimated Out-of-Pocket Costs: $15,030,000,000.

Estimated Out-of-Pocket Cost Per FY2020 Respondent: $2,147.

Total Estimated Monetized Burden: $25,200,000,000.

Estimated Monetized Burden Per FY2020. Respondent: $3,600.

Note:

Amounts below are for FY2020. 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. Detail may not add due to rounding.

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

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

Appendix A

Appendix B