Overview
Title
Proposed Information Collection; Comment Request for Regulation Project
Agencies
ELI5 AI
The IRS wants to know if the information they collect about certain organizations is helpful or if it's too much work for people to provide. They are asking everyone to give their thoughts by April 19, 2021.
Summary AI
The Internal Revenue Service (IRS) is asking for public comments on information collections related to the Payout Requirements for Type III Supporting Organizations that are not functionally integrated. This is part of their ongoing efforts to reduce the paperwork burden as required by the Paperwork Reduction Act of 1995. The IRS is interested in feedback on several aspects, including the necessity and accuracy of the information collected, ways to improve its quality, and methods to reduce the burden on respondents. Comments should be sent by April 19, 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. IRS is soliciting comments concerning Payout Requirements for Type III Supporting Organizations that are not Functionally Integrated.
Keywords AI
Sources
AnalysisAI
The document from the Federal Register discusses a request for public comments by the Internal Revenue Service (IRS) regarding information collections connected to the "Payout Requirements for Type III Supporting Organizations" that are not functionally integrated. This request is a part of the IRS's ongoing effort to reduce paperwork and the associated burden on respondents according to the Paperwork Reduction Act of 1995. Feedback is being solicited to consider how these information collections are handled and to improve their effectiveness and efficiency.
General Summary
The IRS has issued a notice inviting comments from the public and other federal agencies on the collection of information concerning specific payout requirements for certain non-profit organizations. Known as Type III Supporting Organizations that are not functionally integrated, these entities must comply with regulations that were updated following the Pension Protection Act of 2006. The IRS is evaluating the continuance of this information collection and seeks public input by April 19, 2021.
Significant Issues or Concerns
Several issues are present in the document, including the lack of clarity on the practical utility of the information collection for individuals who may not be familiar with tax regulations or nonprofit structures. The language used in discussing the extension of an approved information collection may be confusing, particularly for those unfamiliar with these procedures. Additionally, the document does not clearly explain how the changes brought about by the Pension Protection Act of 2006 impact the organizations involved, which could hinder public understanding.
Moreover, the accuracy and relevance of the estimated burden on respondents are subjects of potential concern. The document suggests around 11,994 respondents with an estimated time commitment of two hours each annually; however, how these figures were obtained is not well explained, raising questions about their reliability.
Public Impact
Broadly, this request for comments might affect a variety of stakeholders who interact with or are part of Type III Supporting Organizations. By streamlining paperwork and possibly reducing unnecessary information collections, the IRS could potentially make compliance less burdensome for affected entities. A clearer and more efficient information collection process benefits the IRS as it leads to better-managed data and reduced administrative costs.
Stakeholders Affected
Non-Profit Organizations: These organizations, specifically Type III Supporting Organizations, are directly impacted by the regulations. The processing burden could see a reduction if the IRS implements meaningful feedback from the public.
The IRS and Federal Agencies: Continued refinement of information collection processes stands to benefit the IRS and other federal agencies by ensuring that they receive the necessary information in a less cumbersome manner, improving data accuracy and usability.
Potentially Affected Individuals and Institutions: While the call for comments targets organizations, interested individuals who work within these nonprofits or consult for them could also find value in participating in the feedback process.
In conclusion, while the IRS's initiative to solicit public input is a positive step towards more efficient regulatory practices, the effectiveness of the notice would improve with clearer explanations and justifications for how data requirements align with organizational and legislative goals. Addressing these concerns might boost stakeholder engagement and lead to regulatory processes that better serve both public agencies and the organizations they govern.
Issues
• The document does not clearly explain the practical utility of the information collection in a way that is easy to understand by non-experts.
• Language regarding the extension of an approved collection and renewal purposes could be clarified to aid public understanding.
• The document could benefit from clearer language regarding the impact of the regulations on the affected organizations.
• The abstract provides a high-level overview but lacks detailed context about the necessity and implications of the changes made by the Pension Protection Act of 2006.
• The estimated burden of the collection in terms of respondents and time may not provide enough context about how these figures were derived, potentially impacting its perceived accuracy.