Overview
Title
Agency Information Collection Activities; Submission for OMB Review; Comment Request; Preparer Hardship Waiver Request and Preparer Explanation for Not Filing Electronically
Agencies
ELI5 AI
The Department of the Treasury is asking people to comment on forms that help tax helpers ask for special permission to submit taxes on paper instead of online if they face tough times. Think of it like asking your parents if you can turn in your homework on paper if your computer breaks.
Summary AI
The Department of the Treasury is announcing an opportunity for the public to comment on its information collection request regarding tax preparers. The document explains that tax preparers can use IRS Forms 8944 and 8948 to request waivers and provide explanations when not filing electronically, due to hardships. This initiative is part of complying with the Paperwork Reduction Act of 1995. Public comments are invited by March 29, 2021, and more information can be obtained by contacting Molly Stasko or visiting the website specified in the notice.
Abstract
The Department of the Treasury will submit the following information collection request 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.
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Sources
AnalysisAI
The Department of the Treasury has announced a public comment period for an information collection request concerning tax preparers, as documented in a recent Federal Register notice. This initiative invites comments from the public as part of compliance with the Paperwork Reduction Act of 1995. Tax preparers who face difficulties in filing returns electronically may utilize IRS Forms 8944 and 8948 to request waivers or provide explanations for filing on paper. Feedback is solicited until March 29, 2021.
General Summary
The notice highlights the Treasury's request for comment on tax preparer activities regarding electronic filing. In particular, it allows preparers to apply for waivers from electronic filing requirements using designated IRS forms when they encounter hardships. The Treasury aims to ensure that the mandatory electronic filing does not impose undue burdens on preparers who might struggle with compliance due to various challenges.
Significant Issues or Concerns
One area of concern is the ambiguity surrounding what qualifies as a "hardship" for tax preparers. The document does not provide specific criteria or examples, which might result in inconsistent interpretations and applications for waivers. This lack of clarity could complicate the process for preparers who are uncertain if their circumstances meet the threshold for a waiver.
The estimated annual burden of over 18 million hours for compliance suggests that the process might be excessively complex or burdensome. This could point to an inefficient allocation of resources both for the IRS and affected tax preparers, indicating a need for streamlining the process to reduce compliance times and costs.
Additionally, the overall financial impact on businesses is not addressed. Preparers potentially need to invest in technology to avoid the necessity of requesting waivers, which could be a significant expense, especially for smaller firms.
Impact on the Public
The document's public comment invitation aims to engage with a broad audience, providing an opportunity for various stakeholders to express their opinions and concerns. However, the reliance on electronic submission through a government website might limit participation from individuals or organizations without reliable internet access, restricting their ability to contribute to the discussion.
Impact on Specific Stakeholders
For businesses, especially smaller tax-preparing firms, the potential complexity and time burden of compliance pose challenges. They might face financial strains in upgrading their systems to meet electronic filing requirements, or spend considerable time dealing with waiver requests.
Conversely, the initiative to allow comments can be seen as a positive step toward considering stakeholder input. This may lead to refinements that could ultimately reduce the administrative load on tax preparers and result in more efficient operations.
In conclusion, while the Treasury's steps towards accommodating preparers facing electronic filing hardships demonstrate responsiveness, the complexities and potential exclusions in the commenting process and the significant time burden remain crucial areas needing attention. Stakeholders, particularly small businesses, may find these requirements burdensome, though they have an opportunity to voice their concerns and possibly influence future iterations of the policy.
Issues
• The document does not explain what constitutes a 'hardship' for tax preparers filing electronically, which may lead to ambiguity in what qualifies for a waiver.
• The significant estimated burden of 18,270,900 hours for compliance may suggest this requirement is overly complex or burdensome, potentially indicating inefficient use of resources for both the IRS and affected businesses.
• The document lacks information on the potential financial impact on businesses, especially if they must invest in technology or systems to avoid requesting waivers.
• The explanation of why a tax preparer might file on paper instead of electronically, as mentioned with Form 8948, could be elaborated to clarify any specific qualifying conditions.
• The public comment method via www.reginfo.gov could limit accessibility for those without internet access, potentially excluding stakeholder voices.