34698 Federal Register / Vol. 83, No. 140 / Friday, July 20, 2018 / Notices 

requiring a Recipient to have a legally 

binding agreement with an entity that 

has a mortgage lending license is often 

not feasible. In this scenario, it is more 

reliable to have the Recipient provide 

the mortgage financing directly to the 

Low-Income Families. The CDFI Fund 

has determined that for the purpose of 

evidencing Commitment to a Project for 

Purchase and achieving Project 

Completion for Purchase, a Recipient’s 

entire portfolio of Homeownership 

financed and/or supported with its CMF 

Award will be deemed a Project. 

For the above stated reasons, the CDFI 

Fund is issuing a general waiver herein 

of 12 CFR 1807.501(b) in cases where 

the CMF Award Recipient serves in the 

role as the developer for the Project or 

is financing and/or supporting a Project 

for Purchase and the Project is not 

owned, sponsored, or being developed 

by a limited partnership or limited 

liability company or other separate 

entity. Additionally, the CDFI Fund is 

issuing a general waiver herein of 12 

CFR 1807.501(b) in cases where the 

Recipient is committing its CMF Award 

to a Loan Loss Reserve made by the 

Recipient, where the reserve is not 

pledged to a third party or separate 

entity affiliated with the Recipient, but 

is used to reserve against losses from 

loans directly made by the Recipient. 

In lieu of a legally binding written 

agreement, such Recipients will be able 

to evidence a Commitment via a Board 

of Director’s resolution for an identified 

Project. The resolution will be required 

to be in the form and substance 

acceptable to the CDFI Fund in its sole 

discretion. The CDFI Fund has 

determined that providing this waiver 

does not adversely affect the 

achievement of the purposes of HERA. 

Authority: Pub. L. 110–289. 12 U.S.C. 

4701, 12 CFR part 1805, 12 CFR part 1807, 

12 CFR part 1815, 12 U.S.C. 4502. 

Mary Ann Donovan, 

Director, Community Development Financial 

Institutions Fund. 

[FR Doc. 2018–15473 Filed 7–19–18; 8:45 am] 

BILLING CODE 4810–70–P 

DEPARTMENT OF THE TREASURY 

Internal Revenue Service 

Proposed Collection; Comment 

Request for Regulation Project 

AGENCY: Internal Revenue Service (IRS), 

Treasury. 

ACTION: Notice and request for 

comments. 

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 continuing 

information collections, as required by 

the Paperwork Reduction Act of 1995. 

The IRS is soliciting comments on forms 

used by individual taxpayers: Comment 

Request focused on Form 1040 and 

Schedules 1, 2, 3, 4, 5, 6, the 

discontinuance of 1040A and 1040EZ 

and revised Form W–4. The remainder 

of the collection including Schedules A, 

B, C, C–EZ, D, E, EIC, F, H, J, R, and SE, 

Form 1040NR, Form 1040NR–EZ, Form 

1040X, and all attachments to these 

forms will be addressed on the next 

submission of the information 

collection. 

DATES: Comments should be received on 

or before September 18, 2018 to be 

assured of consideration. 

ADDRESSES: Taxpayers may submit 

comments electronically via the Federal 

eRulemaking Portal at 

www.regulations.gov (type IRS–2018– 

0015 in the search field on the 

regulation.gov homepage to find this 

notice and submit comments). All 

recommendations for guidance 

submitted by the public in response to 

this notice will be available for public 

inspection and copying in their entirety. 

Direct all written comments to Laurie 

Brimmer, Internal Revenue Service, at 

(202) 317–5756, Room 6529, 1111 

Constitution Avenue NW, Washington, 

DC 20224. 

FOR FURTHER INFORMATION CONTACT: 

Requests for additional information or 

copies of the form should be directed to 

Kerry Dennis at Internal Revenue 

Service, at (202) 317–5751 Room 6529, 

1111 Constitution Avenue NW, 

Washington, DC 20224, or through the 

internet, at omb.unit@irs.gov. 

SUPPLEMENTARY INFORMATION: 

PRA Approval of Forms Used by 

Individual Taxpayers 

Under the PRA, OMB assigns a 

control number to each ’’collection of 

information’’ that it reviews and 

approves for use by an agency. The PRA 

also requires agencies to estimate the 

burden for each collection of 

information. Burden estimates for each 

control number are displayed in (1) PRA 

notices that accompany collections of 

information, (2) Federal Register notices 

such as this one, and (3) OMB’s 

database of approved information 

collections. 

Taxpayer Burden Model 

The IRS uses the Individual Taxpayer 

Burden Model (ITBM) to estimate the 

burden experienced by individual 

taxpayers when complying with Federal 

tax laws. The model was developed 

using a survey of tax year 2015 

individual taxpayers that was fielded in 

2016 and 2017. The approach to 

measuring burden focuses on the 

characteristics and activities undertaken 

by individual taxpayers in meeting their 

tax return filing obligations. 

Burden is defined as the time and outof-pocket costs incurred by taxpayers in 

complying with the Federal tax system. 

Out-of-pocket costs include any 

expenses incurred by taxpayers to 

prepare and submit their tax returns. 

Examples include tax return preparation 

fees, the purchase price of tax 

preparation software, submission fees, 

photocopying costs, postage, and phone 

calls (if not toll-free). 

The methodology distinguishes 

among preparation method, taxpayer 

activities, taxpayer type, filing method, 

and income level. Indicators of tax law 

and administrative complexity, as 

reflected in the tax forms and 

instructions, are incorporated into the 

model. 

Preparation methods reflected in the 

model are as follows: 

• Self-prepared without software, 

• Self-prepared with software, and 

• Use of a paid preparer or tax 

professional. 

Types of taxpayer activities reflected 

in the model are as follows: 

• Recordkeeping, 

• Tax planning, 

• Gathering tax materials, 

• Use of services (IRS and other), 

• Form completion, and 

• Form submission. 

Taxpayer Burden Estimates 

Summary level results from fiscal year 

2018 using this methodology are 

presented below. The data shown were 

the best forward-looking estimates 

available for income tax returns filed for 

tax year 2017. 

The burden estimates were based on 

tax year 2017 statutory requirements as 

of January 31, 2018 for taxpayers filing 

a tax year 2017 Form 1040, 1040A, or 

1040EZ tax return. Time spent and outof-pocket costs are presented separately. 

Time burden is broken out by taxpayer 

activity, with record keeping 

representing the largest component. 

Out-of-pocket costs include any 

expenses incurred by taxpayers to 

prepare and submit their tax returns. 

Examples include tax return preparation 

and submission fees, postage and 

photocopying costs, and tax preparation 

software costs. 

Reported time and cost burdens are 

national averages and do not necessarily 

reflect a ‘‘typical’’ case. Most taxpayers 


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Federal Register / Vol. 83, No. 140 / Friday, July 20, 2018 / Notices 34699 

experience lower than average burden, 

with taxpayer burden varying 

considerably by taxpayer type. For 

instance, the estimated average time 

burden for all taxpayers filing a tax year 

2017 Form 1040, 1040A, or 1040EZ is 

12 hours, with an average cost of $210 

per return. This average includes all 

associated forms and schedules, across 

all preparation methods and taxpayer 

activities. The average burden for 

taxpayers filing a tax year 2017 Form 

1040 is about 15 hours and $270; the 

average burden for taxpayers filing a tax 

year 2017 Form 1040A is about 7 hours 

and $90; and the average for a tax year 

2017 Form 1040EZ filers is about 5 

hours and $40. 

Within each of these estimates there 

is significant variation in taxpayer 

activity. For example, tax year 2017 

non-business taxpayers are expected to 

have an average burden of about 8 hours 

and $120, while tax year 2017 business 

taxpayers are expected to have an 

average burden of about 21 hours and 

$410. Similarly, tax preparation fees and 

other out-of-pocket costs vary 

extensively depending on the tax 

situation of the taxpayer, the type of 

software or professional preparer used, 

and the geographic location. 

Proposed PRA Submission to OMB 

Title: U.S. Individual Income Tax 

Return. 

OMB Number: 1545–0074. 

Form Numbers: Form 1040 and 

Schedules 1, 2, 3, 4, 5, 6, the 

discontinuance of 1040A and 1040EZ 

and revised Form W–4. 

Abstract: These forms are used by 

individuals to report their income tax 

liability. The data is used to verify that 

the items reported on the forms are 

correct, and also for general statistical 

use. 

Current Actions: 

2018 Draft Form 1040 

The revised 2018 Form 1040 is in 

draft form and subject to change. The 

updated form, full set of draft 

instructions, and updated burden and 

cost estimates will be included in the 

30day FRN issued by Treasury. 

Following the most expansive tax law 

changes in 30 years, Treasury asked the 

IRS to look at ways to improve the 1040 

filing experience. In response, the IRS 

took a strategic look at the family of 

1040 forms with a goal of simplifying 

the experience for taxpayers and our 

partners in the tax industry. The 2018 

draft Form 1040 replaces the current 

Form 1040 as well as the Form 1040A 

and the Form 1040EZ. The 2018 draft 

Form 1040 uses a ‘‘building block’’ 

approach, which can be supplemented 

with additional schedules as needed. 

The 2018 draft Form 1040 goes from the 

current 79 lines to somewhere around 

23 lines. Taxpayers with straightforward 

tax situations would only need to file 

this new 1040 with no additional 

schedules. The changes effective in 

2018 and affecting the tax returns 

taxpayers will file in 2019 include (but 

are not limited to); 

The Filing Status section was 

simplified. The filing status is ‘‘Single’’ 

if only one name is entered; ‘‘Married 

filing jointly’’ if two are entered and no 

filing status box is checked. 

Information for the standard 

deduction was moved below the name 

entry spaces. 

The checkbox for ‘‘Full-year health 

care coverage’’ was moved to the first 

page. 

The ‘‘Exemptions’’ section was 

renamed ‘‘Dependents.’’ Taxpayers will 

continue to list individuals for whom 

they claim tax benefits associated with 

an exemption. Only two dependents can 

be listed on the form itself. Just as in 

2017, dependents who cannot be listed 

on the form must be identified in an 

attached statement. 

The entry spaces for subtotaling 

exemptions were removed; a new 

checkbox was added for dependents 

who qualify for the credit for other 

dependents. 

The signature block was moved. An 

entry space was added for the spouse’s 

identity protection PIN in lieu of the 

taxpayer’s daytime phone number. The 

‘‘Paid Preparers’’ section was shortened 

and a third-party designee box was 

added. Taxpayers with third-party 

designees or a foreign address must 

attach Schedule 6. 

Line 4 (IRAs, pensions and annuities) 

combined 2017 Form 1040, lines 15 and 

16. 

Line 6 is a subtotal from Schedule 1, 

which includes less common types of 

income, as well as any adjustments to 

income. 

Line 9 was added for the qualified 

business income deduction under 

section 199A. 

Line 11 is the chapter 1 tax. 

Taxpayers with less common situations 

will enter an amount from Schedule 2, 

which generally includes lines 44 

through 47 of the 2017 Form 1040. 

Line 12 is the child tax credit and/or 

credit for other dependents. Taxpayers 

with other nonrefundable credits, will 

enter a subtotal from Schedule 3, which 

generally includes lines 48 through 55 

of the 2017 Form 1040. 

Line 14 is a subtotal from Schedule 4, 

which generally includes the items from 

the ‘‘Other Taxes’’ section of the 2017 

Form 1040. 

Line 17 is refundable credits and 

some payments. The earned income 

credit, additional child tax credit, and 

American opportunity tax credit remain 

on the form. Taxpayers with other 

credits and payments will enter an 

amount from Schedule 5, which 

generally includes items from the 

‘‘Payments’’ section of the 2017 Form 

1040. Treasury’s Office of Tax Analysis 

projects that roughly 25% of projected 

2018 individual income tax filers would 

be able to file the new form without any 

attachments (meaning any of the six 

new schedules or any existing forms or 

schedules that are retained). For 

context, in Tax Year 2015, 16% of 1040 

series returns filed were Form 1040–EZ. 

2019 Draft Form W–4 

The Form W–4 was changed for 2019 

as a result of PL 115–97 (Tax Reform 

Act of 2017), especially section 11041, 

which reduced the personal exemption 

amount to zero and modified the statute 

related to withholding of tax from 

wages. Even though most tax changes 

were effective for tax year 2018, PL 115– 

97 allowed these withholding changes 

to be delayed until 2019. 

The Form W–4 is modified to remove 

the reliance on the personal exemption 

and discrete number of withholding 

allowances. The Form W–4 has separate 

instructions, which provide 

comprehensive guidance for employees 

and employers. For ease of use in 

simple situations, a summary version of 

the instructions has been added to the 

back of the 2019 W–4 form for quick 

reference. New lines were added to the 

W–4 in order to provide more accurate 

withholding amounts. 

The Form W–4 provides more 

accurate withholding by addressing 

credits, other income, deductions and a 

graduated tax rate structure directly, 

rather than converting these items to a 

discrete number of withholding 

allowances tied to the personal 

exemption amount under prior law. The 

Form W–4 reduces complexity for 

employees by allowing them to directly 

report tax credits and adjustments to 

income, rather than using worksheets to 

convert these items to withholding 

allowances. 

Burden Impact Evaluation 

A thorough analysis of the impact of 

the Tax Cuts and Jobs Act (TCJA) of 

2017 on the burden faced by individual 

taxpayers in complying with the Federal 

tax law is still underway but 

preliminary results indicate that the 

overall impact of the law on individuals 

will lower taxpayer burden. Currently, 

the average time to complete a tax year 

2018 individual tax return is estimated 


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34700 Federal Register / Vol. 83, No. 140 / Friday, July 20, 2018 / Notices 

to decrease by 4% to 7% and the 

average out-of-pocket costs are 

estimated to decrease 1% to 3%. A more 

detailed evaluation of the impact of 

specific provisions will be provided 

soon. 

The expected impact of TCJA 

provisions by statutory and 

discretionary change are provided 

below: 

Statutory Changes—Overall, the 

statutory changes are expected to lead to 

an overall decrease in burden. There are 

three major changes that are expected to 

have a material impact on burden in the 

TCJA. 

1. The increase in the standard 

deduction and the limitation on the 

Schedule A tax deduction, taken 

together, are the most substantial 

changes introduced in the TCJA. These 

changes are expected to decrease the 

number of Schedule A filers from 46 

million to 20 million. The 26 million 

drop in Schedule A filings is expected 

to lead to a material decrease in burden. 

2. The change in thresholds on the 

Form 6251 for alternative minimum tax 

is expected to lead to a significant 

decrease in Form 6251 filings, from 10 

million to 1 million or less. This change 

should also lead to a material drop in 

burden. 

3. The new Sec 199A Deduction for 

qualified business income is expected to 

increase burden for many filers who 

report sole proprietor and passthrough 

income. The deduction is also expected 

to increase the number of filers with 

sole proprietors and passthrough 

income which should increase burden. 

Overall, the decreases in burden from 

the change in Schedule A and Form 

6251 filings are expected to more than 

offset the increase burden from the Sec 

199A Deduction. 

IRS Discretionary Changes—The 

largest discretionary change in place for 

tax year 2018 is the redesign of the Form 

1040 and the discontinuance of Forms 

1040A, and 1040EZ. Modest decreases 

in burden are expected for some 

taxpayers who prepare by hand without 

using a paid preparer or tax software but 

overall, the transition from Forms 1040, 

1040A, and 1040EZ to the shortened 

Form 1040 is not expected to have a 

material impact on the burden 

individual taxpayers face. 

Approximately 95% of individual 

taxpayers use a paid preparer or tax 

software to complete their tax return 

and almost 90% of individual taxpayers 

e-file. Currently, these taxpayers using 

assisted methods interact with either a 

tax software interface or a paid prepare 

so they have limited interaction with 

the tax forms themselves. There is very 

little expectation for their experience to 

change so the form redesign is not 

expected to have a material impact on 

them. 

The impact of the Form 1040 redesign 

on the approximately 5% of individual 

taxpayers who complete their taxes by 

hand without using a paid preparer or 

software is not expected to have a 

material impact on overall filing burden. 

The current expectation is that some 

taxpayers who prepare unassisted will 

have marginally lower burden while 

others will have marginally higher 

burden. For example, taxpayers who 

previously filed a Form 1040EZ may 

experience slightly more burden 

because they need to evaluate more 

information than before while a segment 

of taxpayers who previously filed the 

Form 1040 and 1040A may experience 

slightly less burden because they need 

to evaluate less information than before. 

In addition, some filers are expected to 

experience a reduction in burden from 

the separation of the components of the 

Form 1040 onto the new set of 

schedules while some are not. Overall, 

the minor increases and decreases that 

this population experiences are 

expected to mostly offset and lead to an 

immaterial change in burden. 

Type of Review: Revision of currently 

approved collections. 

Affected Public: Individuals or 

households. 

Estimated Number of Respondents: 

157,800,000. 

Total Estimated Time: 1.970 billion 

hours (1,970,000,000 hours). 

Estimated Time per Respondent: 

12.48 hours. 

Total Estimated Out-of-Pocket Costs: 

$32.315 billion ($32,315,000,000). 

Estimated Out-of-Pocket Cost per 

Respondent: $205. 

Total Estimated Monetized Burden: 

$63.373 billion ($63,373,000,000). 

Estimated Monetized Burden per 

Respondent: $402. 

The following paragraph applies to all 

of the collections of information covered 

by this notice. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless the collection of information 

displays a valid OMB control number. 

Books or records relating to a collection 

of information must be retained as long 

as their contents may become material 

in the administration of any internal 

revenue law. Generally, tax returns and 

tax return information are confidential, 

as required by 26 U.S.C. 6103. 

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 shall 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 17, 2018. 

Roberto Mora-Figueroa, 

Acting Section Chief, Special Services. 

[FR Doc. 2018–15627 Filed 7–18–18; 11:15 am] 

BILLING CODE 4830–01–P 


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