SUPPORTING STATEMENT
         (Form 8916-A)

1.	CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION

Form 8916-A will be used to provide a detailed reconciliation of the amount of Cost of Goods Sold reported on Schedule M-3 for Form 1120, Form 1065, or 1120S. 

	The authority is Internal Revenue Code section 6011 (P.L. 105-206, Title II, 
Sections 2001 through 2005).

2.	USE OF DATA              

This form will enable LMSB to obtain detailed information on cost of goods sold.

3.	USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN

This form is intended to be electronically filed.  

4.	EFFORTS TO IDENTIFY DUPLICATION

We have attempted to eliminate duplication within the agency wherever possible.  

5.	METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER       SMALL ENTITIES

	We have attempted to minimize the burden on small businesses or other small 	entities. 

6. 	CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES

Not applicable.

7.	SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE    INCONSISTENT WITH GUIDELINES IN 5 CFR 1320.5(d)(2)

Not applicable.

8.	CONSULTATION WITH INDIVIDUALS OUTSIDE OF THE AGENCY ON     AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS

Periodic meetings are held between IRS personnel and representatives of the American Bar Association, the National Society of Public Accountants, the American Institute of Certified Public Accountants, and other professional groups to discuss tax law and tax forms. During these meetings, there is an opportunity for those attending to make comments regarding Form 8916-A.

We will publish a notice in the Federal Register in the near future to solicit public 
comments on Form 8916-A.	

9.	EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO     RESPONDENTS

Not applicable.

10.	ASSURANCE OF CONFIDENTIALITY OF RESPONSES

Generally, tax returns and tax return information are confidential as required by 26 USC 6103.

11.	JUSTIFICATION OF SENSITIVE QUESTIONS

Not applicable.

12.	ESTIMATED BURDEN OF INFORMATION COLLECTION

	The burden estimate is as follows:

                          		 Number of       	Time per    	    	 Total
                	       		 Responses         	Response      	 	Hours

            Form 8916-A             156,000             	22.16 hours		3,456,960

Estimates of the annualized cost to respondents for the hour burdens shown are not available at this time.

13.	ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS

Estimates of capital or start-up costs and costs of operation, maintenance, and purchase of services to provide information are not available at this time.

14.	ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT

The primary cost to the government consists of the cost of printing Form 8916-A.  We estimate that the cost of printing the form is $1,000.00.

15.	REASONS FOR CHANGE IN BURDEN

Not applicable.

16.	PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION

Not applicable.

17.	REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS      INAPPROPRIATE

See attachment.

18.	EXCEPTIONS TO THE CERTIFICATION STATEMENT ON OMB FORM 83-I

Not applicable.

Note:  The following paragraph applies to all of the collections of information in this submission:

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.	

	REASON FOR EMERGENCY SUBMISSION  
          
 The Form 8916-A is a required attachment to the 1120, 1120S, and 1065 Schedule M-3s for certain filers that are reporting a reconciliation of cost of goods on the Schedule M-3.  If the Form 8916-A is not available it cannot be attached to the Schedule M-3 submitted by these taxpayers, and these taxpayers will be unable to file an accurate and complete Schedule M-3 as required under Internal Revenue Code section 6011 (P.L. 105-206, Title II, Section 2001 through 2005).  Also, if the Form 8916-A is not available for filing by taxpayers, the Internal Revenue Service will be unable to accomplish the stated mission of the Schedule M-3 initiative supported by LMSB and the U.S. Department of the Treasury, which is obtaining greater transparency of taxpayer books and records.