Overview
Title
Proposed Collection; Comment Request for Form 5309
Agencies
ELI5 AI
The IRS wants to hear what people think about a form used to check special plans where employees own part of the company, trying to make sure filling it out is easy and doesn't take too long. They think it might take a lot of time to fill out, so they're asking if there's a better way to do it.
Summary AI
The Internal Revenue Service (IRS) is seeking public comments on an information collection related to the Application for Determination of Employee Stock Ownership Plan. This is part of their effort to reduce paperwork and respondent burden, as required by the Paperwork Reduction Act of 1995. Comments should address the necessity and effectiveness of the information collection, and be submitted by April 20, 2021. The IRS estimates that 2,500 responses will be received, each taking approximately 10 hours and 47 minutes to complete.
Abstract
The Internal Revenue Service (IRS), 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 Application for Determination of Employee Stock Ownership Plan.
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AnalysisAI
Summary
The Internal Revenue Service (IRS) has issued a notice inviting public comments on the information collection process relating to the Application for Determination of Employee Stock Ownership Plans. This initiative is part of the IRS's ongoing efforts to reduce paperwork and lessen the burden on respondents, in accordance with the Paperwork Reduction Act of 1995. Public comments on the necessity, effectiveness, and potential burden of this information collection process must be submitted by April 20, 2021. The IRS anticipates receiving 2,500 responses, with each response expected to take approximately 10 hours and 47 minutes.
Significant Issues and Concerns
There are several noteworthy issues associated with this document:
Lack of Cost Information: The document does not provide details on the costs businesses might incur due to this information collection. Without this information, stakeholders might find it challenging to assess whether this process represents a justifiable use of resources.
Clarity on Burden Minimization: The IRS does not elaborate on plans to reduce the information collection burden through technological means. Details about specific methods or technologies could enhance transparency and public understanding.
High Estimated Burden: The estimated total annual burden of 26,975 hours for 2,500 responses appears substantial. A more thorough explanation or breakdown of this estimate may be necessary to confirm there is no unnecessary burden on businesses.
Criteria for Public Comments: While the IRS seeks public input on the necessity and utility of the information collection, the document lacks specific criteria or illustrative examples to guide the public in evaluating these factors effectively.
Technical Terminology: The use of specific IRS jargon, such as references to "Code section 409 or 4975(e)(7)," might be difficult for the general public to understand. Including straightforward explanations would improve accessibility.
Broad Public Impact
The document's request for input potentially impacts a wide array of stakeholders, including businesses that participate in Employee Stock Ownership Plans. If the public perceives the information collection process as imposing an unjustified burden, it could lead to pushback and calls for further streamlining of IRS processes. Conversely, efficient data collection can help ensure tax compliance and proper functioning of stock ownership plans.
Impact on Specific Stakeholders
For businesses, particularly those involved in employee stock ownership plans, the document could have both positive and negative impacts:
Positive Impact: Businesses may see a beneficial reduction in paperwork and compliance burdens if public feedback leads to process improvements.
Negative Impact: The significant time estimate for completing the form and the lack of clarity on reducing burden might be concerning. Unresolved, these issues could contribute to resource strain, particularly for smaller businesses with limited administrative capacity.
In conclusion, the IRS's request for comments is an important opportunity for the public and specific stakeholders to voice their views and influence the efficiency of information collection related to employee stock ownership plans. However, further clarity and detailed guidance within the notice could enhance this process, ensuring meaningful and constructive feedback.
Issues
• The document does not provide specific information on potential costs associated with the collection of information and its burden on businesses, which could be seen as wasteful or unnecessary resource allocation if not justified.
• There is a lack of clarity on how the IRS intends to minimize the burden of information collection on businesses through the use of technology; more details could improve transparency and understanding.
• The estimated total annual burden of 26,975 hours for 2,500 responses seems high, and further breakdown or justification might be necessary to ensure there is no unnecessary burden on businesses.
• The document invites comments on the necessity and utility of information collection, but lacks specific criteria or examples that would help the public assess these factors more effectively.
• While the document is generally clear, the use of technical IRS terminology such as 'Code section 409 or 4975(e)(7)' might be difficult for non-experts to understand without additional explanation.