Overview
Title
Agency Information Collection Activities; Submission for OMB Review; Comment Request; Internal Revenue Service Request for Section 754 Revocation
Agencies
ELI5 AI
The Department of the Treasury wants to hear what people think about using a new form for businesses that want to change a special decision they made about taxes. They want to know if the new form makes it easier or harder for people, and they are collecting comments to decide if using the form is a good idea.
Summary AI
The Department of the Treasury is seeking public comments on new information collection requests related to the revocation of Section 754 elections. These requests, which will be submitted to the Office of Management and Budget (OMB), involve the use of IRS Form 15254 by businesses to apply for the revocation. Interested parties have until February 3, 2020, to provide feedback on these proposals. The revocation requests have increased following changes in tax laws in 2017.
Abstract
The Department of the Treasury will submit the following information collection requests to the Office of Management and Budget (OMB) for review and clearance in accordance with the Paperwork Reduction Act of 1995, on or after the date of publication of this notice. The public is invited to submit comments on these requests.
Keywords AI
Sources
AnalysisAI
The document from the Department of the Treasury, published in the Federal Register, discusses new efforts to collect information regarding the revocation of Section 754 elections. This pertains to tax adjustments related to partners’ interests in partnerships. Subsequent to the Tax Cuts and Jobs Act of 2017, which eliminated specific technical terminations, there has been an observed increase in requests for revocations of Section 754 elections. The Internal Revenue Service (IRS) has created a new form, Form 15254, as a response to this surge, which is aimed at facilitating the collection of necessary information for these requests.
General Summary
The Treasury Department, on behalf of the IRS, has prepared a new information collection initiative regarding Section 754 revocation requests and has submitted this initiative to the Office of Management and Budget for approval. The revocations have increased because of changes brought by the 2017 tax reforms. Public feedback is invited within 30 days from the publication date, specifically by February 3, 2020.
Significant Issues and Concerns
Several issues emerge upon review of this notice. Firstly, it is not clearly articulated why the increase in these revocation requests necessitates a distinct form. An assessment of whether the new form is adequately designed to address the increased workload remains unexplained. Moreover, while the estimated time per response is noted to be 5 hours and 7 minutes, this potentially significant demand on businesses—particularly smaller establishments—is not justified within the document.
The use of technical language poses another challenge. While it might be appropriate for tax professionals, it could be obtuse for small business owners or general stakeholders unfamiliar with specialized tax terminology. Lastly, there is little discussion surrounding the process or repercussions for partnerships whose revocation requests are denied, which might be vital information for those affected.
Public Impact
Broadly, the general public may not be directly impacted by the specifics of this form or the related tax details. However, as partnerships play a vital role in the economy, any change in how they interact with tax laws can have ripple effects, influencing economic activity and, potentially, employment.
Impact on Specific Stakeholders
Businesses, especially partnerships such as small business owners, are principal stakeholders. They may find this development results in additional administrative work and associated costs. For those without dedicated tax expertise, deciphering the form could be daunting. On the other hand, the adoption of a standardized form could eventually streamline the process of submitting revocation requests if implemented effectively.
In sum, while the document lays out an initiative to accommodate changes in tax policy, it lacks thorough communication of its necessity and implications. Clearer articulation of reasons behind the new form, its expected efficacy, and potential outcomes for denied requests may facilitate a better understanding and adoption by affected parties.
Issues
• The document does not provide a detailed explanation of why the increase in Section 754 election revocation requests necessitates a new form, potentially leaving unclear whether the new form best addresses the need.
• The estimated time per response of 5 hours and 7 minutes may be burdensome for small businesses or organizations, but the necessity of this time investment is not explained.
• The language used to describe the process or necessity of IRS Form 15254 is technical and may not be easily understood by all stakeholders, particularly those not familiar with tax terminology.
• The document does not include a cost analysis or justification for the estimated total annual burden hours, which could help assess if this is a cost-effective measure.
• There is no information provided on the potential impact or outcome for partnerships if their Section 754 revocation requests are denied.