Overview
Title
Proposed Collection; Comment Request for Sales of Business Property
Agencies
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The IRS wants people to tell them how they can make it easier to fill out Form 4797, which is used to report selling business stuff. They are looking for ideas to make it quicker and simpler, and you need to send your thoughts by March 16, 2021.
Summary AI
The Internal Revenue Service (IRS) is asking for public feedback on the ongoing collection of information related to sales of business property, as outlined by the Paperwork Reduction Act of 1995. This involves the use of Form 4797 to report sales, exchanges, or involuntary conversions of business assets. The IRS seeks comments on various aspects of this information gathering, including its necessity, accuracy, and ways to improve efficiency and reduce respondent burden. Comments should be submitted by March 16, 2021, to ensure consideration.
Abstract
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 continuing information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning sales of business property.
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Sources
AnalysisAI
The document from the Federal Register outlines a request from the Internal Revenue Service (IRS) for public comments on the information collection process related to sales of business property. This process involves using Form 4797 to report sales, exchanges, or involuntary conversions of business assets. The request is in line with the Paperwork Reduction Act of 1995, which seeks to lessen the burden of paperwork and ensure efficient information collection.
General Summary
The IRS notice seeks feedback from the public and other federal agencies on the collection of information concerning the sales of business property. This effort aims to evaluate and possibly improve the collection process by gaining insights into areas like necessity and accuracy. Comments are encouraged on the practicality of the information collected and the possibility of reducing the burden on respondents through improved methods. Interested parties have until March 16, 2021, to submit their comments.
Significant Issues or Concerns
While the IRS demonstrates a willingness to hear from the public, there are notable gaps in the notice. Primarily, it lacks specific data on how previous public comments were used to refine the process. Additionally, the document presents an estimated response time of just over 50 hours per respondent without an explanation, which might lead to concerns about whether this process could be more efficient.
Moreover, no specific strategies to reduce the burden—other than automated collection techniques—are highlighted. The lack of detailed feedback from past collection cycles prevents an understanding of continuous improvement in the process. Lastly, potential confusion might arise from the dual contact information provided without clear guidance on whom to address specific queries.
Impact on the Public
Broadly, the potential reduction in paperwork burden and more efficient information collection could lead to a smoother process for individuals and businesses that engage in transactions involving business property. If the IRS implements improvements based on public feedback, taxpayers might experience less time-consuming compliance and paperwork.
Impact on Specific Stakeholders
Business or For-Profit Organizations: For businesses, especially those repeatedly filing Form 4797, streamlining the process could save substantial time and resources, making compliance less cumbersome.
Individuals and Households: Persons who occasionally engage in business property sales might face less complexity and time commitment if feedback leads to improved form design or information systems.
Farms and Agricultural Businesses: These groups, often burdened with detailed tax reporting, may find any increased efficiency beneficial, allowing them to focus more on productive activities rather than administrative tasks.
The request for commentary could result in positive changes that reduce taxpayer burden while improving data accuracy and utility for the IRS. However, the success of this process depends significantly on the IRS's ability to act on the insights gathered through public input.
Issues
• There is no clear explanation of how many public comments were received in previous periods and how they were utilized to improve the process.
• The document does not provide a breakdown of the estimated total annual burden hours of 16,454,750, which could be useful for understanding the components of the burden.
• The estimated time per response of 50 hours, 38 minutes may be perceived as high without an explanation of why it takes this long, which might need clarification.
• There is a lack of information about any specific steps the IRS is taking to minimize the burden of information collection, apart from general statements about automated techniques.
• The section requesting public comments does not specify if there are any particular areas of concern or improvement beyond the general categories listed.
• The document does not clarify if any changes or improvements resulted from the last collection cycle, if any.
• The document provides the contact information for further inquiries, but it may not be clear to some readers whether they should contact Kinna Brewington or Kerry Dennis for specific issues.