Overview
Title
Proposed Collection; Comment Request for Form 6765
Agencies
ELI5 AI
The IRS wants people to tell them what they think about a form that helps with getting money back for doing research. They're asking for ideas on how to make the form easier to use, and you need to let them know by April 19, 2021.
Summary AI
The Internal Revenue Service (IRS) is seeking public comments on Form 6765, which relates to the Credit for Increasing Research Activities. This request is part of an effort to reduce paperwork and make the process easier for individuals and businesses that use the form to report research-related tax credits. Comments from the public and other agencies are welcomed to ensure the form meets its purpose efficiently, and should be submitted by April 19, 2021. The form’s usage is governed by the Paperwork Reduction Act, and it helps verify the correctness of tax credits claimed for research activities.
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 information collections, as required by the Paperwork Reduction Act of 1995. The IRS is soliciting comments concerning Form 6765, Credit for Increasing Research Activities.
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Sources
AnalysisAI
The document is an official notice from the Internal Revenue Service (IRS) inviting the public and other federal agencies to comment on the use of Form 6765, which relates to the Credit for Increasing Research Activities. The IRS's goal is to reduce paperwork and respondent burden as mandated by the Paperwork Reduction Act of 1995. Interested parties are encouraged to submit their comments by April 19, 2021, to ensure their feedback is considered.
General Summary
This initiative is part of a broader IRS effort to streamline tax-related processes and reduce unnecessary efforts for taxpayers. Form 6765 is used by businesses and individuals to calculate and claim tax credits for increased research activities, which is an incentive for promoting innovation and development in various industries. The IRS is specifically seeking input on the form's effectiveness, accuracy in estimating the burden on respondents, and potential improvements, including the use of technology to facilitate easier form completion and submission.
Significant Issues
There are several concerns worthy of attention within this document:
Lack of Cost Estimates: The notice does not provide any estimated costs related to the operation, maintenance, or acquisition of services for information collection. This omission might obscure the true financial burden on those who need to comply.
Complex Language: Legal references and jargon like "IRC section 41" and "OMB control number" may not be easily understood by individuals without a background in tax law, potentially limiting the ability of the general public to provide informed feedback.
Terminology Clarity: Terms like "respondent burden" might be unclear to those not familiar with tax procedures, making it challenging for taxpayers to fully comprehend the document's intent and relevance.
Privacy Concerns: While comments become part of the public record, the document does not address how personal information will be protected, leaving potential gaps in privacy assurance for those submitting feedback.
Public Impact
Broadly, this call for comments is likely to affect taxpayers involved in research activities, as any subsequent changes to Form 6765 may alter how these credits are claimed. By inviting public and agency input, the IRS aims to ensure that the process for claiming research tax credits is efficient and fair.
Impact on Stakeholders
Businesses and Innovators: These stakeholders might benefit positively if the resulting changes from this initiative make it easier to claim tax credits, minimizing administrative burdens and potentially enhancing their ability to invest in research and development.
General Public: For individuals indirectly affected by changes in tax policy, particularly those employed in research-intensive industries, any enhancement in the ease of claiming these credits could promote greater job security and innovation outcomes.
Tax Professionals: Those who assist clients with tax filings may face adjustments in their advisory roles depending on any revisions made to Form 6765 following this public feedback process.
By addressing these issues and embracing suggested improvements, the IRS has the opportunity to create a more streamlined and user-friendly process for claiming research credits, ultimately supporting the nation's research and development sector. Nonetheless, careful consideration of feedback handling, privacy, and simplified language will be crucial for engaging a broad audience effectively.
Issues
• The document does not mention any estimated cost of operation, maintenance, or purchase of services related to information collection, which could obscure the financial burden on respondents.
• The document includes legal references and jargon (e.g., 'IRC section 41', 'OMB control number') which may not be easily understandable to the general public without prior tax law knowledge.
• The wording 'respondent burden' might be unclear to the general public or individuals not familiar with taxation and paperwork terminology.
• There is a lack of detailed explanation on automated collection techniques and other forms of information technology mentioned to minimize the burden of the collection.
• The document mentions comments being made a matter of public record but does not specify how privacy will be maintained for respondents providing potentially sensitive feedback.