Notice2023-15598
Proposed Collection; Comment Request for U.S. Employment Tax Returns and Related Forms; CT-1, CT-1X, CT-2, SS-8, SS-8 (PR), W-2, W-2 AS, W-2 C, W-2 GU, W-2 VI, W-3, W-3 (PR), W-3 C, W-3 C (PR), W-3 SS, 940, 940 (PR), 940 SCH A, 940 SCH A (PR), 940 SCH R, 941, 941 (PR), 941 SCH B, 941 SCH B (PR), 941 SCH D, 941 SCH R, 941 SS, 941 X, 941 X (PR), 943, 943 (PR), 943 A, 943 A (PR), 943 SCH R, 943 X, 943 X (PR), 944, 944 X, 945, 945 A, 945 X, 2032, 2678, 8027, 8027 T, 8453 EMP, 8850, 8879 EMP, 8922, 8952, and 8974
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
July 24, 2023
Issuing agencies
Treasury DepartmentInternal Revenue Service
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 proposed and/or continuing information collections, as required by the Paperwork Reduction Act of 1995 (PRA). The IRS is soliciting comments on U.S. Employment Tax Returns and related Forms.
Full Text
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<title>Federal Register, Volume 88 Issue 140 (Monday, July 24, 2023)</title>
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[Federal Register Volume 88, Number 140 (Monday, July 24, 2023)]
[Notices]
[Pages 47555-47559]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-15598]
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DEPARTMENT OF THE TREASURY
Internal Revenue Service
Proposed Collection; Comment Request for U.S. Employment Tax
Returns and Related Forms; CT-1, CT-1X, CT-2, SS-8, SS-8 (PR), W-2, W-2
AS, W-2 C, W-2 GU, W-2 VI, W-3, W-3 (PR), W-3 C, W-3 C (PR), W-3 SS,
940, 940 (PR), 940 SCH A, 940 SCH A (PR), 940 SCH R, 941, 941 (PR), 941
SCH B, 941 SCH B (PR), 941 SCH D, 941 SCH R, 941 SS, 941 X, 941 X (PR),
943, 943 (PR), 943 A, 943 A (PR), 943 SCH R, 943 X, 943 X (PR), 944,
944 X, 945, 945 A, 945 X, 2032, 2678, 8027, 8027 T, 8453 EMP, 8850,
8879 EMP, 8922, 8952, and 8974
AGENCY: Internal Revenue Service (IRS), Treasury.
[[Page 47556]]
ACTION: Notice and request for comments.
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SUMMARY: 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
proposed and/or continuing information collections, as required by the
Paperwork Reduction Act of 1995 (PRA). The IRS is soliciting comments
on U.S. Employment Tax Returns and related Forms.
DATES: Written comments should be received on or before September 22,
2023 to be assured of consideration.
ADDRESSES: Direct all written comments to Andres Garcia, Internal
Revenue Service, Room 6526, 1111 Constitution Avenue NW, Washington, DC
20224, or by email <a href="/cdn-cgi/l/email-protection#601012014e030f0d0d050e1413200912134e070f16"><span class="__cf_email__" data-cfemail="9aeae8fbb4f9f5f7f7fff4eee9daf3e8e9b4fdf5ec">[email protected]</span></a>. Include 1545-0029 or U.S.
Employment Tax Returns and Related Forms.
FOR FURTHER INFORMATION CONTACT: Requests for additional information or
copies of the form and instructions should be directed to Kerry Dennis,
at (202) 317-5751, Internal Revenue Service, Room 6526, 1111
Constitution Avenue NW, Washington, DC 20224, or through the internet,
at <a href="/cdn-cgi/l/email-protection#43082631313a6d07262d2d2a30032a31306d242c35"><span class="__cf_email__" data-cfemail="1a517f686863345e7f747473695a736869347d756c">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
Change in PRA Approval of Forms Used by Employers
Under the PRA, OMB assigns a control number to each ``collection of
information'' that it reviews and approves for use by an agency. A
single information collection may consist of one or more forms,
recordkeeping requirements, and/or third-party disclosure requirements.
Under the PRA and OMB regulations, agencies have the discretion to seek
separate OMB approvals for forms, recordkeeping requirements, and
third-party reporting requirements or to combine any number of forms,
recordkeeping requirements, and/or third-party disclosure requirements
(usually related in subject matter) under one OMB Control Number.
Agency decisions on whether to group individual requirements under a
single OMB Control Number or to disaggregate them and request separate
OMB Control Numbers are based largely on considerations of
administrative practicality.
The PRA also requires agencies to estimate the burden for each
collection of information. Accordingly, each OMB Control Number has an
associated burden estimate. The burden estimates for each control
number are displayed in (1) the PRA notices that accompany collections
of information, (2) Federal Register notices such as this one, and (3)
in OMB's database of approved information collections. If more than one
form, recordkeeping requirement, and/or third-party disclosure
requirement is approved under a single control number, then the burden
estimate for that control number reflects the burden associated with
all of the approved forms, recordkeeping requirements, and/or third-
party disclosure requirements.
As described below under the heading ``Updated Burden Estimate
Methodology,'' the IRS's currently accepted burden estimate methodology
is based on taxpayers' tax reporting experience taking into account,
among other things, the forms and schedules used by those taxpayers and
the recordkeeping and other activities needed to complete those forms.
The transition of the employer-related reporting burden represents the
IRS's continued effort to improve the ability of IRS to measure the
burden imposed on various groups of taxpayers by the Federal tax
system. While the improved methodology provides a more accurate and
comprehensive description of employer reporting burden, it will not
provide burden estimates on a form-by-form basis, as has been done
under the previous methodology. When the prior model was developed in
the mid-1980s, almost all tax returns were prepared manually, either by
the taxpayer or a paid provider. In this context, it was determined
that estimating burden on a form-by-form, line-by-line basis was an
appropriate methodology. Employer-related returns are increasingly
being prepared using software or with preparer assistance. In this
current reporting environment, in which many taxpayers' activities are
no longer as directly associated with particular forms, estimating
burden on a form-by-form basis is not an appropriate method of
estimating taxpayer burden. The currently accepted methodology, which
takes into account broader and more comprehensive taxpayer
characteristics and activities, provides a much more accurate and
useful estimate of taxpayer burden.
Currently, there are 51 forms and 38 regulations used by employers
pertaining to their employment-related reporting requirements. These
include Forms CT-1, CT-1X, CT-2, SS-8, SS-8 (PR), W-2, W-2 AS, W-2 C,
W-2 GU, W-2 VI, W-3, W-3 (PR), W-3 C, W-3 C (PR), W-3 SS, 940, 940
(PR), 940 SCH A, 940 SCH A (PR), 940 SCH R, 941, 941 (PR), 941 SCH B,
941 SCH B (PR), 941 SCH D, 941 SCH R, 941 SS, 941 X, 941 X (PR), 943,
943 (PR), 943 A, 943 A (PR), 943 SCH R, 943 X, 943 X (PR), 944, 944 X,
945, 945 A, 945 X, 2032, 2678, 8027, 8027 T, 8453 EMP, 8850, 8879 EMP,
8922, 8952, and 8974, and their schedules, and all the forms employers
attach to employment-related tax returns (see the Appendix to this
notice). For most of these forms, IRS has in the past obtained separate
OMB approvals under unique OMB Control Numbers and separate burden
estimates.
The currently accepted methodology estimates the aggregate burden
imposed on employers, based upon their reporting-related
characteristics and activities. IRS therefore will seek OMB approval of
all 51 employer-related tax forms as a single ``collection of
information.'' The aggregate burden of these tax forms will be
accounted for under OMB Control Number 1545-0029, which is currently
assigned to Form 941. OMB Control Number 1545-0029 will be displayed on
all employer tax forms and related information collections. As a result
of this change, burden estimates for employers will now be displayed
differently in PRA Notices on tax forms and other information
collections, and in Federal Register notices. This new way of
displaying burden is presented below under the heading ``Proposed PRA
Submission to OMB.''
Updated Burden Estimate Methodology
The updated burden estimate methodology revises the estimates of
the levels of burden experienced by employers when complying with their
Federal reporting requirements pertaining to employment related taxes.
It replaces the earlier burden estimate methodology developed in the
mid-1980s. Since that time, improved technology and modeling
sophistication have enabled the IRS to improve the burden estimates.
The new methodology provides taxpayers and the IRS with a more
comprehensive understanding of the current levels of taxpayer burden.
It reflects major changes over the past two decades in the way
taxpayers prepare and file their returns. The new burden estimate
methodology also represents a substantial step forward in the IRS's
ability to assess likely impacts of administrative and legislative
changes on employers.
The updated burden estimate methodology focuses on the
characteristics and activities of employers rather than solely focusing
on the forms they file. Key determinants of taxpayer burden in the
model are the number of employees, employee turnover, level of
compensation, economic activity associated with
[[Page 47557]]
employment related credits, and frequency of filing. Indicators of tax
law and administrative complexity, as reflected in the tax forms and
instructions, are incorporated into the model. Tax compliance burden
does not include a taxpayer's tax liability, economic inefficiencies
caused by sub-optimal choices related to tax deductions or credits, or
psychological costs. The previous estimates primarily focused on the
number of line items of each tax form. The changes between the old and
new burden estimates are due to the improved ability of the new
methodology to measure burden and the expanded scope of what is
measured. These changes create a one-time shift in the estimate of
imposed burden. It is important to note that the difference between the
legacy and revised estimates do not reflect any change in the actual
burden imposed by taxpayers.
Methodology
Burden is defined as the time and out-of-pocket costs incurred by
taxpayers to comply with their Federal tax reporting responsibilities.
As has been done for individual taxpayer burden since 2005, business
entity burden since 2014, and tax-exempt organization burden since 2018
both the time expended and the out-of-pocket costs for employers are
estimated. The burden estimation methodology relies on surveys that
gather data about time and out-of-pocket costs that employers spend on
pre-filing and filing activities. The methodology establishes
econometric relationships between tax return characteristics and
reported compliance costs. The methodology controls for the
substitution of time and money by monetizing time and reporting total
compliance costs in dollars. This methodology better reflects taxpayer
compliance burden, because in a world of electronic tax preparation,
time and out-of-pocket costs are governed by the information required
rather than the form on which it is ultimately reported. Importantly,
even where various employers complete the same tax form lines, the new
methodology differentiates the cost incurred to complete those forms
based on characteristics of those employers. Key employer
characteristics that serve as coefficients in the employer reporting
burden model are:
<bullet> Number of employees
<bullet> Employee turnover
<bullet> Level of compensation
<bullet> Economic activity associated with employment related credits
and/or benefits
<bullet> Frequency of filing
<bullet> Type of primary form filed
The new burden estimate methodology uses the following
classifications of employers:
Strata
----------------------------------------------------------------------------------------------------------------
Percent of forms W-2
Primary form Number of W2s filed with reported benefits Reported tips
----------------------------------------------------------------------------------------------------------------
Form 941............................. 1 to 4................. None................... ANY.
5 to 19................ None................... ANY.
20 to 99............... None................... NO.
100 to 299............. None................... NO.
300 to 999............. None................... NO.
Over 1000.............. None................... NO.
1 to 19................ Less Than 10%.......... NO.
20 to 99............... Less Than 10%.......... NO.
100 to 299............. Less Than 10%.......... NO.
300 to 999............. Less Than 10%.......... NO.
Over 1000.............. Less Than 10%.......... NO.
1 to 19................ Greater Than 10%....... NO.
20 to 99............... Greater Than 10%....... NO.
100 to 299............. Greater Than 10%....... NO.
300 to 999............. Greater Than 10%....... NO.
Over 1000.............. Greater Than 10%....... NO.
1 to 19................ ANY.................... YES.
20 to 99............... ANY.................... YES.
100 to 299............. ANY.................... YES.
300 to 999............. ANY.................... YES.
Over 1000.............. ANY.................... YES.
Form 944............................. ANY.................... ANY.................... ANY.
Form 943............................. ANY.................... ANY.................... ANY
----------------------------------------------------------------------------------------------------------------
Proposed PRA Submission to OMB
Title: U.S. Employment Tax Returns and related Forms.
OMB Number: 1545-0029.
Form Numbers: CT-1, CT-1X, CT-2, SS-8, SS-8 (PR), W-2, W-2 AS, W-2
C, W-2 GU, W-2 VI, W-3, W-3 (PR), W-3 C, W-3 C (PR), W-3 SS, 940, 940
(PR), 940 SCH A, 940 SCH A (PR), 940 SCH R, 941, 941 (PR), 941 SCH B,
941 SCH B (PR), 941 SCH D, 941 SCH R, 941 SS, 941 X, 941 X (PR), 943,
943 (PR), 943 A, 943 A (PR), 943 SCH R, 943 X, 943 X (PR), 944, 944 X,
945, 945 A, 945 X, 2032, 2678, 8027, 8027 T, 8453 EMP, 8850, 8879 EMP,
8922, 8952, and 8974.
Abstract: These forms are used by employers to report their
employment tax related activity. The data is used to verify that the
items reported on the forms are correct.
Current Actions: The burden estimation methodology for employment
tax is being transitioned from the legacy ADL model to the Taxpayer
Burden Model. The changes discussed above result in a burden hour
estimate of 456,000,000 hours, a decrease in total estimated time
burden of 492,967,465 hours. The newly reported total out-of-pocket
costs is $18,910,000,000 and total monetized burden is $33,540,000,000.
The change related to the transition of the burden estimate from the
legacy Arthur D. Little Model methodology to the RAAS Taxpayer Burden
Model, is a one-time change. In addition, changes are being made to the
form to be current with enacted legislation.
Type of Review: Revision of currently approved collections.
Affected Public: Employers.
[[Page 47558]]
Estimated Number of Respondents: 7,128,000.
Total Estimated Time: 456,000,000 hours.
Estimated Time per Respondent: approximately 64 hours.
Total Estimated Out-of-Pocket Costs: $18,910,000,000.
Estimated Out-of-Pocket Cost per FY2020 Respondent: $2,653.
Total Estimated Monetized Burden: $33,540,000,000.
Estimated Monetized Burden per FY2020. Respondent: $4,705.
Fiscal Year (FY) 2023 Burden Total Estimates for Employment Tax Forms, Schedules, and Regulations
[FY2023]
----------------------------------------------------------------------------------------------------------------
Program
Program change change due Program
FY20 due to adjustment to new change due FY23
legislation to agency
----------------------------------------------------------------------------------------------------------------
Responses per year.............. * 339,405,986 (332,277,986) 0 0 ** 7,128,000
Burden in Hours................. 948,967,465 (492,967,465) 0 0 456,000,000
Time Burden in Monetized Hours.. $0 $146,265,62000 0 0 $146,265,62000
Out-of-Pocket Costs............. $0 $18,910,000,000 0 0 $18,910,000,000
Total Monetized Burden*......... $0 $33,540,000,000 0 0 $33,540,000,000
----------------------------------------------------------------------------------------------------------------
Source: IRS:RAAS:KDA (04-15-23).
* FY20 responses per year is count of all forms and schedules filed under legacy A.D. Little burden estimate
methodology.
** FY23 responses per year is count of all employers under taxpayer-centric RAAS burden estimate methodology.
This approach is also used for OMB 1545-0074 individuals, 1545-0123 (business entities), and 1545-0047 (tax-
exempt) organizations.
*** Total monetized burden = Monetized hours + Out-of-pocket costs.
Note: Reported time and cost burdens are national averages and do not necessarily reflect a ``typical'' case.
Most taxpayers experience lower than average burden, with taxpayer burden varying considerably by taxpayer
type. Detail may not add due to rounding.
Request for Comments
Comments submitted in response to this notice will be summarized
and/or included in the request for OMB approval. All comments will
become a matter of public record. Comments are invited on: (a) Whether
the collection of information is necessary for the proper performance
of the functions of the agency, including whether the information will
have practical utility; (b) the accuracy of the agency's estimate of
the burden of the collection of information; (c) ways to enhance the
quality, utility, and clarity of the information to be collected; (d)
ways to minimize the burden of the collection of information on
respondents, including through the use of automated collection
techniques or other forms of information technology; and (e) estimates
of capital or start-up costs and costs of operation, maintenance, and
purchase of services to provide information.
Approved: July 18, 2023.
Kerry Dennis,
Tax Analyst.
Appendix A
------------------------------------------------------------------------
Form Title/description OMB No.
------------------------------------------------------------------------
CT-1............................. Employer's Annual 1545-0001
Railroad Retirement Tax
Return.
CT-1X............................ Adjusted Employer's 1545-0001
Annual Railroad
Retirement Tax Return
or Claim for Refund.
CT-2............................. Employee 1545-0002
Representative's
Quarterly Railroad Tax
Return.
SS-8............................. Determination of Worker 1545-0004
Status for Purposes of
Federal Employment
Taxes and Income Tax
Withholding.
SS-8 (PR)........................ Determination of 1545-0004
Employee Work Status
for Purposes of Federal
Employment Taxes and
Income Tax (Puerto
Rican Version).
W-2.............................. Wage and Tax Statement.. 1545-0008
W-2 AS........................... American Samoa Wage and 1545-0008
Tax Statement.
W-2 C............................ Corrected Wage and Tax 1545-0008
Statement.
W-2 GU........................... Guam Wage and Tax 1545-0008
Statement.
W-2 VI........................... U.S. Virgin Islands Wage 1545-0008
and Tax Statement.
W-3.............................. Transmittal of Wage and 1545-0008
Tax Statements.
W-3 (PR)......................... Transmittal of 1545-0008
Withholding Statements
(Puerto Rican Version).
W-3 C............................ Transmittal of Corrected 1545-0008
Wage and Tax Statements.
W-3 C (PR)....................... Transmittal of Corrected 1545-0008
Wage and Tax Statements
(Puerto Rican Version).
W-3 SS........................... Transmittal of Wage and 1545-0008
Tax Statements.
940.............................. Employer's Annual 1545-0028
Federal Unemployment
(FUTA) Tax Return.
940 (PR)......................... Employer's Annual 1545-0028
Federal Unemployment
(FUTA) Tax Return
(Puerto Rican Version).
940 SCH A........................ Multi-State Employer and 1545-0028
Credit Reduction
Information.
940 SCH A (PR)................... Multi-State Employer and 1545-0028
Credit Reduction
Information (Puerto
Rican Version).
940 SCH R........................ Allocation Schedule for 1545-0028
Aggregate Form 940
Filers.
941.............................. Employer's Quarterly * 1545-0029
Federal Tax Return.
941 (PR)......................... Employer's Quarterly * 1545-0029
Federal Tax Return.
941 SCH B........................ Report of Tax Liability * 1545-0029
for Semiweekly Schedule
Depositors.
941 SCH B (PR)................... Supplemental Record of * 1545-0029
Federal Tax Liability
(Puerto Rican Version).
941 SCH D........................ Report of Discrepancies * 1545-0029
Caused by Acquisitions,
Statutory Mergers, or
Consolidations.
941 SCH R........................ Reconciliation for * 1545-0029
Aggregate Form 941
Filers.
941 SS........................... Employer's QUARTERLY * 1545-0029
Federal Tax Return
(American Samoa, Guam,
the Commonwealth of
Northern Mariana
Islands, and the U.S.
Virgin Islands).
941 X............................ Adjusted Employer's * 1545-0029
QUARTERLY Federal Tax
Return or Claim for
Refund.
941 X (PR)....................... Adjusted Employer's * 1545-0029
QUARTERLY Federal Tax
Return or Claim for
Refund (Puerto Rico
Version).
943.............................. Employer's Annual Tax 1545-0035
Return for Agricultural
Employees.
[[Page 47559]]
943 (PR)......................... Employer's Annual Tax 1545-0035
Return for Agricultural
Employees (Puerto Rican
Version).
943 A............................ Agricultural Employer's 1545-0035
Record of Federal Tax
Liability.
943 A (PR)....................... Agricultural Employer's 1545-0035
Record of Federal Tax
Liability (Puerto Rican
Version).
943 R............................ Allocation Schedule for 1545-0035
Aggregate Form 943
Filers.
943 X............................ Adjusted Employer's 1545-0035
Annual Federal Tax
Return for Agricultural
Employees or Claim for
Refund.
943 X (PR)....................... Adjusted Employer's 1545-0035
Annual Federal Tax
Return for Agricultural
Employees or Claim for
Refund.
944.............................. Employer's ANNUAL 1545-2007
Federal Tax Return.
944 X............................ Adjusted Employer's 1545-2007
ANNUAL Federal Tax
Return or Claim for
Refund.
945.............................. Annual Return of 1545-1430
Withheld Federal Income
Tax.
945 A............................ Annual Record of Federal 1545-1430
Tax Liability.
945 X............................ Adjusted ANNUAL Return 1545-1430
of Withheld Federal
Income Tax or Claim for
Refund.
2032............................. Contract Coverage Under 1545-0137
Title II of the Social
Security Act.
2678............................. Employer/Payer 1545-0748
Appointment of Agent.
8027............................. Employer's Annual 1545-0714
Information Return of
Tip Income and
Allocated Tips.
8027 T........................... Transmittal of 1545-0714
Employer's Annual
Information Return of
Tip Income and
Allocated Tips.
8453 EMP......................... Employment Tax 1545-0967
Declaration for an IRS
e-file Return.
8850............................. Pre-Screening Notice and 1545-1500
Certification Request
for the Work
Opportunity Credit.
8879 EMP......................... IRS e-file Signature 1545-0967
Authorization for Forms
940, 940-PR, 941, 941-
PR, 941-SS, 943, 943-
PR, 944, and 945.
8922............................. Third-Party Sick Pay * 1545-0123
Recap.
8952............................. Application for 1545-2215
Voluntary
Classification
Settlement Program
(VCSP).
8974............................. Qualified Small Business 1545-0029
Payroll Tax Credit for
Increasing Research
Activities.
------------------------------------------------------------------------
* 1545-0123 will not be discontinued. It is the Business collection and
8922 will be included in both the Business collection and the
Employment Tax collection.
* 1545-0029 will not be discontinued it will be the number assigned to
all Forms within the employment tax collection.
Appendix B
------------------------------------------------------------------------
Guidance title/description OMB No.
------------------------------------------------------------------------
26 CFR 31.6001-1 Records in general; 26 CFR 31.6001-2 1545-0798
Additional Records under FICA; 26 CFR 31.6001-3,
Additional records under Railroad Retirement Tax Act; 26
CFR 31.6001-5 Additional records..........................
Tip Reporting Alternative Commitment (TRAC) Agreement for 1545-1529
Use in the Cosmetology and Barber Industry to Employment
Tax.......................................................
Reg-111583-07 (TD 9405) (Final)--Employment Tax 1545-2097
Adjustments; REG-130074-11--Rules Relating to Additional
Medicare Tax..............................................
------------------------------------------------------------------------
[FR Doc. 2023-15598 Filed 7-21-23; 8:45 am]
BILLING CODE 4830-01-P
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