SUPPORTING STATEMENT
Internal Revenue Service (IRS)
Long-Term Care and Accelerated Death Benefits
Form 1099-LTC OMB #1545-1519
CIRCUMSTANCES NECESSITATING COLLECTION OF INFORMATION
Internal Revenue Code (IRC) sections 7702B and 101(g) respectively define situations under which benefits paid under a long-term health care insurance contract and accelerated death benefits paid under a life insurance policy may qualify for special tax treatment. IRC section 6050Q requires the payer to report all such benefit amounts paid during any calendar year, specifying whether or not the benefits were paid in whole or in part on a per diem or other periodic basis without regard to expenses.
Benefit payers use Form 1099-LTC to report any long-term care or accelerated death benefits paid to an individual. Payers include insurance companies, governmental units, and viatical settlement providers.
USE OF DATA
The IRS will match the data with the information reported on individual tax returns to determine whether amounts paid under a qualified long-term care insurance contract or as accelerated death benefits paid under a life insurance policy are properly reported.
USE OF IMPROVED INFORMATION TECHNOLOGY TO REDUCE BURDEN
Electronic filing of Form 1099-LTC is currently available.
EFFORTS TO IDENTIFY DUPLICATION
The information obtained through this collection is unique and is not already available for use or adaptation from another source.
METHODS TO MINIMIZE BURDEN ON SMALL BUSINESSES OR OTHER SMALL ENTITIES
This information collection will not have a significant economic impact on small businesses or other small entities.
CONSEQUENCES OF LESS FREQUENT COLLECTION ON FEDERAL PROGRAMS OR POLICY ACTIVITIES
Consequences of less frequent collection would result in the IRS being unable to monitor compliance with the Federal tax rules related to Form 1099-LTC, thereby jeopardizing the ability of the IRS to meet its mission.
SPECIAL CIRCUMSTANCES REQUIRING DATA COLLECTION TO BE INCONSISTENT WITH GUIDELINES IN 5 CFR 1320.5(d)(2)
There are no special circumstances requiring data collection to be inconsistent with guidelines in 5 CFR 1320.5(d)(2).
CONSULTATION WITH INDIVIDUALS OUTSIDE OF THE AGENCY ON AVAILABILITY OF DATA, FREQUENCY OF COLLECTION, CLARITY OF INSTRUCTIONS AND FORMS, AND DATA ELEMENTS
We received no comments during the public comment period in response to the Federal Register notice (90 FR 28865), dated July 1, 2025.
EXPLANATION OF DECISION TO PROVIDE ANY PAYMENT OR GIFT TO RESPONDENTS
No payment or gift has been provided to any respondents.
ASSURANCE OF CONFIDENTIALITY OF RESPONSES
Generally, tax returns and tax return information are confidential as required by 26 U.S.C. 6103.
JUSTIFICATION OF SENSITIVE QUESTIONS
A privacy impact assessment (PIA) has been conducted for information collected under this request as part of the “Information Returns Master-file (IRMF)” and “Information Returns Processing (IRP)” systems. A Privacy Act System of Records notice (SORN) has been issued for these systems under Treasury/IRS 22.061–Information Return Master File (IRMF); Treasury/IRS 24.030-Customer Account Data Engine Master File; and IRS 34.037–IRS Audit Trail and Security Records System. The Internal Revenue Service PIAs can be found at https://www.irs.gov/privacy-disclosure/privacy-impact-assessments-pia.
Title 26 U.S.C. 6109 requires inclusion of identifying numbers in returns, statements, or other documents for securing proper identification of persons required to make such returns, statements, or documents and is the authority for taxpayer identifying numbers in IRS systems.
ESTIMATED BURDEN OF INFORMATION COLLECTION
IRC section 6050Q requires benefit payers to report information to the IRS and the benefit recipient. The IRS anticipates that there will be 410,600 responses annually, for a total estimated burden of 90,300 hours annually.
Authority |
Description |
# of Respondents |
# Responses per Respondent |
Annual Responses |
Hours per Response |
Total Burden Hours |
IRC 6050Q |
Form 1099-LTC |
3,000 |
136.866 |
410,600 |
0.23 |
94,438 |
Totals |
|
3,000 |
|
410,600 |
|
ESTIMATED TOTAL ANNUAL COST BURDEN TO RESPONDENTS
This information collection will be included in the consolidated OMB submission for
information returns currently being developed. IRS is working on the methodology for
evaluating information return burden and cost; and will update the cost and burden
estimates as part of the consolidation.
ESTIMATED ANNUALIZED COST TO THE FEDERAL GOVERNMENT
The Federal Government cost estimate is based on a model that considers the following three cost factors for each information product: aggregate labor costs for development, including annualized startup expenses, operating and maintenance expenses, and distribution of the product that collects the information. These costs do not include any activities such as taxpayer assistance and enforcement.
The government computes cost using a multi-step process. First, the government creates a weighted factor for the level of effort to create each information collection product based on variables, such as complexity, number of pages, type of product, and frequency of revision. Second, the total costs associated with developing the product such as labor cost, and operating expenses associated with the downstream impact such as support functions, are added together to obtain the aggregated total cost. Then, the aggregated total cost and factor are multiplied together to obtain the aggregated cost per product. Lastly, the aggregated cost per product is added to the cost of shipping and printing each product to IRS offices, National Distribution Center, libraries, and other outlets. The result is the government cost estimate per product.
The government cost estimate for this collection is summarized in the table below.
REASONS FOR CHANGE IN BURDEN
There is no change in the paperwork burden previously approved by OMB.
PLANS FOR TABULATION, STATISTICAL ANALYSIS AND PUBLICATION
There are no plans for tabulation, statistical analysis, and publication.
REASONS WHY DISPLAYING THE OMB EXPIRATION DATE IS INAPPROPRIATE
The IRS believes that displaying the OMB expiration date is inappropriate because it could cause confusion by leading taxpayers to believe that the form sunsets as of the expiration date. Taxpayers are not likely to be aware that the IRS intends to request renewal of the OMB approval and obtain a new expiration date before the old one expires.
EXCEPTIONS TO THE CERTIFICATION STATEMENT
There are no exceptions to the certification statement.
| File Type | application/vnd.openxmlformats-officedocument.wordprocessingml.document |
| Author | Wolfgang, Dawn |
| File Created | 2025:09:27 16:14:26Z |