Part 4. Examining Process

Chapter 36. Joint Committee Procedures

Section 5. Reports

4.36.5 Reports

Manual Transmittal

October 02, 2024

Purpose

(1) This transmits revised IRM 4.36.5, Joint Committee Procedures, Reports.

Material Changes

(1) Changes were made to the following subsections:

IRM Subsection Title Description of change
4.36.5.1 Program Scope and Objectives Removed paragraph (1); Renumbered and modified paragraphs (2) thru (5); added new paragraph (6), Contact Information, for consistency with other IRM 4.36 sections. Added note defining "examination team."
4.36.5.1.2 Authority Removed previous language and added reference to IRM 4.36.1.1.2.
4.36.5.1.3 Roles and Responsibilities Changed subsection title for consistency.
4.36.5.1.4 Program Management and Review Added subsection and reference to IRM 4.36.1.1.4.
4.36.5.1.5 Program Controls Added subsection and reference to IRM 4.36.1.1.5.
4.36.5.1.6 Terms/Definitions/Acronyms Removed previous language and added reference to IRM 4.36.1.1.6.
4.36.5.1.7 Related Resources Removed previous language and added reference to IRM 4.36.1.1.7.
4.36.5.2 Types of JC Reports Updated language in paragraph (2) and added title to IRM reference in paragraph (3).
4.36.5.2.1 Regular Report Updated subsection title and consolidated paragraphs (1) and (2) for conciseness.
4.36.5.2.1.1 Short Form Report Included reference to Exhibit 4.36.5-3 in paragraph (1); updated criteria in paragraph (2); revised the years in the example and updated language in paragraphs (3) and (4) for clarity. Removed reference to Form 4081.
4.36.5.2.2 Expedite Refund Report Rewritten for clarification of requirements.
4.36.5.2.3 Minimum Refund Report Consolidated paragraphs (1) and (2) for conciseness and added reference to IRM 4.36.3.7.1. Removed paragraph (3).
4.36.5.2.4 Modified Expedite Refund Report Consolidated paragraphs (1) and (2) for conciseness and added reference to IRM 4.36.3.7.3. Removed paragraph (3).
4.36.5.2.5 Supplemental Report Reordered and reworded the entire subsection for clarity.
4.36.5.2.6 Foreign Sales Corporation (FSC) Report Updated language for clarity.
4.36.5.3 Items Common to JC Reports Updated subsection title and language for clarity. Removed reference to Form 4081.
former 4.36.5.3.1 Form 4081 Removed subsection because the form is no longer used.
4.36.5.3.1 Statement of Years Covered in JC Report Renumbered, updated language for clarity and added title of IRM reference.
4.36.5.3.2 Power of Attorney Renumbered and reworded paragraph to include form title and example.
4.36.5.3.3 Joint Committee Spreadsheet Renumbered and updated language for clarity.
4.36.5.4 JC Report Package Sent to the JCT Removed reference to Figure 4.36.5-1 and added reference to IRM 4.36.5.4.1; updated list. Removed reference to Form 4081.
4.36.5.4.1 Instructions for Submitting JC Reports to the JCT Moved content from former IRM 4.36.5.8 to this new subsection.
4.36.5.5 Discovery of Unreported Refunds Updated subsection title and procedure.
4.36.5.6 Special Situations Updated language and added IRM citations.
4.36.5.6.1 Tentative Allowances from Unexamined Source Years Updated subsection title, updated language for clarity and added reference to IRM 4.36.3.7.2.
4.36.5.6.2 Cases with Unagreed Issues — Minimum Refund Added title of IRM reference to paragraph (1) and removed paragraph (4).
4.36.5.6.3 Request for Refunds — Claims for Unexamined Source or Refund Years —Modified Expedite Refund Added title of IRM reference to paragraph (1) and removed exhibit reference in paragraph (2).
4.36.5.7 Large Deficiency Case Report Overview Updated and expanded.
4.36.5.7.1 Reporting Periods and Dates Updated and expanded.
4.36.5.7.3 Reporting Process New subsection
4.36.5.7.4 Inquiries from the JCT New subsection
4.36.5.7.5 JCT Completion of Review New subsection
former 4.36.5.8 Instructions for Submitting JC Reports to the JCT Moved content to new subsection, IRM 4.36.5.4.1.
4.36.5.8 Joint Committee Report Examples Renumbered and updated order of exhibits.
Figure 4.36.5-1 Joint Committee Report Assembly Removed
Exhibit 4.36.5-1 Outline and Format of Joint Committee Reports Updated format and language of report for consistency.
Exhibit 4.36.5-2 Sample Regular Report Updated title, format and language of report for consistency.
Exhibit 4.36.5-3 Sample Short Form Report Added exhibit with sample report.
Exhibit 4.36.5-4 Sample Expedite Refund Report Renumbered from Exhibit 4.36.5-3. Updated format and language of report for consistency.
Exhibit 4.36.5-5 Sample Minimum Refund Report Renumbered from Exhibit 4.36.5-4. Updated format and language of report for consistency.
Exhibit 4.36.5-6 Sample Modified Expedite Refund Report Updated format and language of report for consistency.
Exhibit 4.36.5-7 Sample Supplemental Report Renumbered from Exhibit 4.36.5-5; updated format and language of report for consistency.
Exhibit 4.36.5-8 Sample Foreign Sales Corporation (FSC) Report Renumbered from Exhibit 4.36.5-7. Updated format and language of report for consistency.
Exhibit 4.36.5-9 Sample Large Deficiency Case Report Renumbered from Exhibit 4.36.5-8. Updated.

(2) All exhibits were converted from non-508-compliant tables to graphics with descriptors.

(3) Various editorial changes were made throughout this IRM section.

Effect on Other Documents

This IRM supersedes IRM 4.36.5, Reports, dated June 21, 2021.

Audience

LB&I, SB/SE, TE/GE

Effective Date

(10-02-2024)

Ronald H. Hodge II
Assistant Deputy Commissioner Compliance Integration
Large Business and International Division

4.36.5.1 (10-02-2024)

Program Scope and Objectives

  1. Purpose: This IRM section describes the various types of Joint Committee (JC) reports and provides guidance on their preparation.

  2. Audience: Examination teams in LB&I, SB/SE and TE/GE who work on cases that meet Joint Committee Review (JCR) program criteria.

    Note:

    For purposes of IRM 4.36, Joint Committee Procedures, the term "examination team" refers to examiners in LB&I, SB/SE, and TE/GE, along with their managers and any specialists who work on the JC case.

  3. Policy Owner: The LB&I Policy Office under the Strategy, Policy and Governance function in the office of the Assistant Deputy Commissioner Compliance Integration organization and the Northeastern Compliance Practice Area (NECPA).

  4. Program Owner: Joint Committee Review program in the NECPA.

  5. Primary Stakeholders: Examination teams, taxpayers and the Joint Committee on Taxation (JCT).

  6. Contact Information: To recommend changes or to make any other suggestions related to this IRM section, see IRM 1.11.6.5, Providing Feedback About an IRM Section – Outside of Clearance. Questions about the IRM content may be emailed to the JCR program at *LB&I Joint Committee Assistance.

4.36.5.1.1 (06-21-2021)

Background

  1. See IRM 4.36.1.1.1, Background.

4.36.5.1.2 (10-02-2024)

Authority

  1. See IRM 4.36.1.1.2 , Authority.

4.36.5.1.3 (10-02-2024)

Roles and Responsibilities

  1. See IRM 4.36.1.1.3, Roles and Responsibilities.

4.36.5.1.4 (10-02-2024)

Program Management and Review

  1. See IRM 4.36.1.1.4, Program Management and Review

4.36.5.1.5 (10-02-2024)

Program Controls

  1. See IRM 4.36.1.1.5, Program Controls

4.36.5.1.6 (10-02-2024)

Terms/Definitions/Acronyms

  1. See IRM 4.36.1.1.6, Terms/Definitions/Acronyms, for a list of commonly used terms.

  2. See IRM Exhibit 4.36.1-1, Acronyms Used Throughout IRM 4.36, for a list of commonly used acronyms.

4.36.5.1.7 (10-02-2024)

Related Resources

  1. See IRM 4.36.1.1.7, Related Resources.

4.36.5.2 (10-02-2024)

Types of JC Reports

  1. The Joint Committee Specialist (JCS) prepares JC reports that are sent to the Joint Committee on Taxation (JCT).Exhibit 4.36.5-1, Outline and Format of Joint Committee Reports, contains general information on report preparation.

  2. The following types of JC reports are submitted to the JCT on refund cases:

    1. Regular

    2. Short form

    3. Expedite refund report

    4. Minimum refund report

    5. Modified expedite report

    6. Supplemental report

    7. Foreign Sales Corporation (FSC)

  4. Pursuant to IRC 6103(f)(2), the IRS reports on deficiency cases to the JCT. See IRM 4.36.5.7, Large Deficiency Case Reports Overview.

4.36.5.2.1 (10-02-2024)

Regular Report

  1. A regular report is prepared for survey-after-assignment or examined cases that do not meet the criteria of any other type of JC report listed in IRM 4.36.5.2, Types of JC Reports. See Exhibit 4.36.5-2, Sample Regular Report.

4.36.5.2.1.1 (10-02-2024)
Short Form Report

  1. A short form report is an abbreviated version of the regular report prepared for cases where all years in the current JC case submission are surveyed-after-assignment or no-changed. See Exhibit 4.36.5-3, Sample Short Form Report.

  2. To qualify, tax years must meet the following criteria:

    1. No previous exam activity, or

    2. If any prior actions were taken by exam, it must be surveyed-after-assignment or no changed, or examined and released by the JCT, or examined and not subject to JC review and six or more years prior to the current tax year.

      Example:

      The current tax year is 2021. The current JC package includes 2014, 2015, 2016 and 2018. Both tax years 2014 and 2015 were previously examined with no JCT release. Tax year 2016 was not previously examined. All tax years are now being surveyed-after-assignment. This case would qualify for the short form report.

  3. The short form report includes:

    1. Taxpayer name

    2. Taxpayer Identification Number (TIN) or Employer Identification Number(EIN)

    3. Tax year(s)

    4. Jurisdictional amount and type

    5. Economic reason for any net operating loss, capital loss or other reason for the refund or credit

    6. A comment that the case has been fully surveyed-after-assignment and/or no-changed

    7. A comment if there is a Power of Attorney on file

    8. A comment if there was a prior JCT release letter

    9. A comment if there are any statute issues

  4. The short form report does not include:

    1. Any attachments except for the JC spreadsheets;

    2. Comments on Separate Return Limitation Year (SRLY) or Corporate Equity Reduction Transaction (CERT) issues, or

4.36.5.2.2 (10-02-2024)

Expedite Refund Report

  1. The expedite refund report is prepared after the case is examined or surveyed-after-assignment where there is a net unpaid IRC 6405(a) refund or credit in excess of the jurisdictional threshold. The expedite refund report is similar to the regular report except that it will be marked “EXPEDITE REFUND.” See Exhibit 4.36.5-4, Sample Expedite Refund Report.

  2. To qualify, tax years must meet both of the following criteria:

    1. Have at least 12 months remaining on the statute when the case is submitted to the JCR program, and

    2. The statute of limitations for all included years must be open as the original statute date or as extended by an unrestricted Form 872, Consent to Extend the Time to Assess Tax.

  3. The IRS may only process an IRC 6405(a) refund or credit with respect to any reportable year prior to release by the JCT if the following conditions exist:

    1. The 30-day period pursuant to IRC 6405(a) has expired. The 30-day period begins when the JCR program receives confirmation from the JCT that the electronic JC report has been received, and

    2. The JCT does not raise concerns about payment of the refund or credit prior to the expiration of the 30-day period. The JCS will notify the examination team that the refund may be processed. The case cannot be closed until a release letter is received.

  4. The IRS will not process an IRC 6405(a) refund or credit with respect to any reportable year prior to release by the JCT if any of the following conditions exist:

    1. If an inquiry is received from the JCT prior to the expiration of the 30-day period

    2. Any portion of the tax, if erroneously refunded, may only be recovered by civil action brought in the name of the United States under the provisions of IRC 7405.

  5. Taxpayers in bankruptcy are generally not eligible for the expedite refund process.

4.36.5.2.3 (10-02-2024)

Minimum Refund Report

  1. A minimum refund report is prepared before the examination team sends the case to Appeals if the requirements of IRM 4.36.3.7.1, Cases with Unagreed Issues — Minimum Refund, are met. A minimum refund report is marked MINIMUM REFUND. See Exhibit 4.36.5-5, Sample Minimum Refund Report.

4.36.5.2.4 (10-02-2024)

Modified Expedite Refund Report

  1. A modified expedite refund report is prepared when the requirements of IRM 4.36.3.7.3 , Request for Refund — Claims from Unexamined Source or Refund Years — Modified Expedite Refund Report, are met. A modified expedite refund report is marked “MODIFIED EXPEDITE REFUND”. See Exhibit 4.36.5-6, Sample Modified Expedite Refund Report.

4.36.5.2.5 (10-02-2024)

Supplemental Report

  1. A supplemental report is prepared when:

    1. A minimum refund was previously reported and the unagreed issues have been resolved. See IRM 4.36.3.7.1 , Cases with Unagreed Issues — Minimum Refund, and IRM 4.36.3.6.4.2 , Competent Authority.

    2. A tentative allowance from an unexamined source year was shown as a tabulation in a prior JC report, the examination or survey-after-assignment of the source year has been completed and the proposed refund exceeds the jurisdictional threshold. See IRM 4.36.5.6.1, Tentative Allowances from Unexamined Source Years.

    3. A modified expedite refund was previously reported, the examination or survey-after-assignment of the claim has been completed and the proposed refund exceeds the jurisdictional threshold. See IRM 4.36.3.7.3 , Request for Refund — Claims from Unexamined Source or Refund Years — Modified Expedite Refund Report.

    4. Unresolved partnership proceedings language was included in a prior JC report, the pass-through adjustment is resolved, the partnership proceedings are completed, and the proposed refund exceeds the jurisdictional threshold. See IRM 4.36.4.10 , TEFRA and Investor Level Statute Control (ILSC) Procedures.

  2. A supplemental report is marked "SUPPLEMENTAL REPORT" . See Exhibit 4.36.5-7, Sample Supplemental Report.

  3. The body of this report refers to the prior JC report, including the date of the previous report, and if applicable, the date of the JCT release letter.

4.36.5.2.6 (10-02-2024)

Foreign Sales Corporation (FSC) Report

  1. A FSC report is prepared for refunds resulting from adjustments to the allocation of income or expenses between the FSC and its domestic parent. A FSC report is marked "FSC EXPEDITE REPORT" . The report should contain a brief explanation of the correlative adjustment(s) omitting lengthy background information. No enclosures are required. See Exhibit 4.36.5-8, Sample Foreign Sales Corporation (FSC) Report.

4.36.5.3 (10-02-2024)

Items Common to All Reports

  1. The following items are common to a JC report, if applicable:

    1. Statement of Years Covered in the JC report;

    2. Power of Attorney, and

    3. JC spreadsheet.

4.36.5.3.1 (10-02-2024)

Statement of Years Covered in Report

  1. The report specifies reportable years and other years affecting the refund or credit. See IRM 4.36.2.4, Determining Joint Committee Jurisdictional Amount and Reportable Years.

4.36.5.3.2 (10-02-2024)

Power of Attorney

  1. Include a copy of Form 2848, Power of Attorney and Declaration of Representative, (or equivalent, i.e., CFINK),if applicable.

4.36.5.3.3 (10-02-2024)

Joint Committee Spreadsheet

  1. Include a JC spreadsheet for regular tax and AMT, unless it is a one-year case with no carryback. If the JC spreadsheet submitted by the examination team is inadequate, the JCS will contact the examination team and request a corrected JC spreadsheet. This spreadsheet can be found at: Joint Committee Spreadsheet.

  2. An additional worksheet is prepared if the taxpayer has credits carried from numerous years and/or foreign tax credits involving different categories.

  3. Additional worksheets are prepared for individual taxpayers for Net Operating Loss Deduction (NOLD) and Alternative Tax Net Operating Loss Deduction (AMT NOLD).

4.36.5.4 (10-02-2024)

JC Report Package Sent to the JCT

  1. The following items are included, if applicable, in the electronic JC report package. See IRM 4.36.5.4.1, Instructions for Submitting JC Reports to the JCT.

  2. Assemble all Joint Committee reports in this order:

    1. JCT data file

    2. JC report

    3. JC spreadsheet

    4. Prior Revenue Agent Report (RAR) and Appeals reports

    5. Current RAR, including Forms 886-A, Explanation of Items, Forms 5701, Notice of Proposed Adjustment, or lead sheets

    6. Prior and current closing agreements (i.e., Form 906, Closing Agreement on Final Determination Covering Specific Matters, etc.)

    7. Power of Attorney

    8. Security agreement, letter of credit, or other similar document, signed by taxpayer

    9. Non-automatic Form(s) 3115, Application for Change in Accounting Method and related consent letters

    10. Other necessary documentation

4.36.5.4.1 (10-02-2024)

Instructions for Submitting JC Reports to the JCT

  1. All JC reports should be emailed directly to the JCT via secure email using a password protected zip file.

4.36.5.5 (10-02-2024)

Discovery of Unreported Refunds

  1. If a refund or credit in excess of the jurisdictional threshold has been refunded without a report to the JCT, the JCR program coordinates with Office of Chief Counsel and the examination team. The failure to timely report should be commented on in the JC report. See IRM 4.36.3.2.3, Discovery of Unreported Refunds.

4.36.5.6 (10-02-2024)

Special Situations

  1. The JC report can be written prior to the completion of an examination for a particular reportable year in the following situations:

    1. Tentative allowances from unexamined source years. See IRM 4.36.5.6.1.

    2. Cases with unagreed issues — minimum refund. See IRM 4.36.5.6.2.

    3. Request for refund — claims from unexamined source or refund years — modified expedite refund. See IRM 4.36.5.6.3.

4.36.5.6.1 (10-02-2024)

Tentative Allowances from Unexamined Source Years

  1. If a report is being drafted where the reportable years have additional tentative allowances from unexamined source years, add the following statement:

    1. Further, under IRM 4.36.3.7.2, this is to advise you that there are the following tentative allowance carrybacks arising from unexamined source years, whose examination will not be completed for a substantial period of time (estimated to be in excess of six months). Upon completion of such examination, the refund will be the subject of a supplemental report, provided the refund amount satisfies the reporting requirements of IRC 6405., and

    2. A tabulation of the tentative allowance carryback amounts, from unexamined source years, will follow the above paragraph.

4.36.5.6.2 (10-02-2024)

Cases with Unagreed Issues — Minimum Refund

  1. If the taxpayer is entitled to an IRC 6405(a) refund, and there is an unagreed issue that will not reduce the 6405(a) refund below the jurisdictional threshold, then a JC report will be written. See IRM 4.36.3.7.1, Cases with Unagreed Issues—Minimum Refund

  2. The report contains the following:

    1. A statement about the unagreed issues.

    2. A statement the case is partially agreed, and a supplemental report will be submitted upon resolution of the unagreed issues, even if the resolution of such issues does not cause an additional refund or credit.

  3. The office that makes the final determination of the taxpayer’s liability (that includes agreed or unagreed issues) for the year(s) previously reported to the JCT prepares the supplemental report.

4.36.5.6.3 (10-02-2024)

Request for Refunds - Claims for Unexamined Source or Refund Years - Modified Expedite Refund

  1. If the taxpayer qualifies for a refund prior to completion of the examination, a modified expedite refund report will be written. See IRM 4.36.3.7.3 , Request for Refunds — Claims for Unexamined Source or Refund Years — Modified Expedite Refund Report.

  2. The report contains a statement about the losses generating the refund and, if possible, the estimated completion date of the examination.

4.36.5.7 (10-02-2024)

Large Deficiency Case Reports Overview

  1. Under the general authority of IRC 8022 and 8023, the JCT conducts post-audit review activities by requesting the largest agreed deficiency cases closed by LB&I. The IRS discloses to the JCT the necessary return information to review such large deficiency cases pursuant to IRC 6103(f)(2).

  2. The following criteria is used to select the large deficiency cases:

    1. The deficiency cases are restricted to the types of taxes reportable as refunds or credits under IRC 6405 (e.g., taxes imposed under Chapter 32 or 45 will not be reported).

    2. The cases reported are deficiencies with respect to Form 1120, U.S. Corporation Income Tax Return.

    3. The cases meet criteria requested by the JCT.

    4. The agreed deficiencies are considered without regard to the fact taxpayers have filed or may file claims for refund for all or a portion of such deficiencies.

  3. Once the large deficiency cases are identified, a large deficiency case (LDC) report package is prepared. The LDC report package includes:

    1. A summary cover letter signed by the LB&I Commissioner

    2. The LDC report prepared by the JCR program

    3. RAR files provided by the examination team

  4. In addition to the above, the LDC report:

    1. Is addressed to the Chief of Staff, Attention Senior Refund Counsel of the Joint Committee on Taxation.

    2. Reflects the reporting period (i.e., March or September) and the year is noted along with the taxpayer’s name, city, state and EIN.

    3. Is not subject to the power of attorney requirements of IRM 4.36.5.3.3.

  5. Exhibit 4.36.5-9 contains an example of the format and language of the LDC reports prepared by the JCR program.

4.36.5.7.1 (10-02-2024)

Reporting Periods and Dates

  1. The examination team with jurisdiction over the large deficiency case provides the required RAR files.

    1. Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment

    2. Form 4549, Report of Income Tax Examination Changes or Form 4549-A

    3. Forms 5701, Notice of Proposed Adjustment, and Forms 886-A, Explanation of Items

  2. The JCR program prepares the LDC reports and electronically submits the complete LDC report package to the JCT for each six-month period..

  3. The six-month periods will be those ending March 31 and September 30 each year. The reports for each period should be submitted on or before July 31 and January 31. For example, the reports for the period ending March 31, are submitted on or before July 31.

4.36.5.7.2 (05-04-2010)

Exceptions

  1. The following types of deficiency cases will not be considered for submission as deficiency case reports:

    1. Cases sent to and considered by Appeals, or docketed in the Tax Court;

    2. Cases where it is known that the deficiency years were reported to the JCT as part of an overpayment case; or

    3. Special Enforcement Program (SEP) cases.

4.36.5.7.3 (10-02-2024)

Reporting Process

  1. LB&I uses data analytics to determine all closed agreed cases with a deficiency for the six-month period ending either March 31 or September 30. The findings are shared and reviewed by the JCR program manager and senior program analyst to ensure large case deficiency cases are identified based on the JCT’s requested criteria.

  2. For each LDC identified, the JCR program manager requests the RAR files to support the large deficiency by emailing the examiner, examination team manager, territory manager, DFO/area executive and senior director with jurisdiction over the case and copies the NECPA senior director and NECPA-Mid Atlantic DFO. The examination team is expected to provide the RAR files to the JCR program manager and senior program analyst within 30 days. The JCR senior program analyst prepares the LDC reports.

  3. The JCR senior program analyst drafts the summary cover letter and for LB&I Commissioner’s signature, Form 14074, Action Routing Sheet, and Form 13839-A, Note to Reviewer, and forwards them to the JCR program manager.

  4. The JCR program manager submits the summary cover letter, Form 14074 - Action Routing Sheet, and Form 13839-A - Note to Reviewer, to the NECPA-MA DFO to request the LB&I Commissioner’s signature.

  5. Upon receiving the LB&I Commissioner’s signed summary cover letter, the JCR senior program analyst electronically submits the LDC report package to the JCT.

  6. The JCR senior program analyst prepares Form 5466-B, Multiple Record of Disclosure, once the LDC report package is sent to JCT.

  7. At the end of the calendar year, the JCR senior program analyst emails a narrative of accounting for all IRC 6103(f)(2) disclosures for the calendar year to *PGLD Disclosure Accounting mailbox and copies the Disclosure Policy & Program Operations senior disclosure analyst. See IRM 11.3.37.3, Accounting System.

4.36.5.7.4 (10-02-2024)

Inquiries from the JCT

  1. Inquiries from the JCT on large deficiency cases are directed to the JCR program manager.

  2. The JCT staff attorneys are congressional staff and any inquiry from them constitutes a congressional inquiry. See IRM 4.36.4.5, Disclosure of Correspondence with the JCT.

  3. All communication with the JCT must go through the JCR program. See IRM 4.36.4.4.1, Types of JCT Inquiries.

  4. Within 5 days of receiving an inquiry, the JCR program manager shares the request with the examiner, examination team manager, territory manager, DFO/area executive, and senior director with jurisdiction over the case and copies NECPA senior director and NECPA-MA DFO . The inquiry is shared with the practice network specialty area for awareness of the issue, if applicable.

    1. The JCR senior program analyst coordinates with the examiner and examination team manager the next steps in preparing a response to be submitted to the JCT.

    2. If a response is not received within 30 days from the examination team, the JCR senior program analyst will follow up and request an update.

  5. The examination team prepares a response and submits it to the JCR program manager.

  6. Upon receipt of the inquiry response from the examination team, the JCR program manager and senior program analyst review it for completeness and submit the response to the JCT.

  7. The JCR program remains involved to ensure the JCT staff attorney receives a timely and satisfactory response.

  8. The JCR senior program analyst updates the electronic referral system as applicable.

  9. If additional inquiries are received, the process outlined above is followed.

4.36.5.7.5 (10-02-2024)

JCT Completion of Review

  1. The JCT provides the JCR program a release letter for each case at the completion of the post-audit large deficiency case review.

  2. Within 5 days of receiving the release letter, the JCR senior program analyst shares the release letter with the examiner, examination team manager, territory manager, DFO/area executive, and senior director with jurisdiction over the case and copies NECPA senior director and NECPA-MA DFO. This lets the examination team know there will be no further questions on the large deficiency case.

  3. The JCR senior program analyst updates the electronic referral system for the release letter.

4.36.5.8 (10-02-2024)

Joint Committee Report Examples

  1. The format and language for specific reports will be shown in the exhibits to follow:

    Exhibit Title
    Exhibit 4.36.5-1 Outline and Format of Joint Committee Reports
    Exhibit 4.36.5-2 Sample Regular Report
    Exhibit 4.46.5-3 Sample Short Form Report
    Exhibit 4.36.5-4 Sample Expedite Refund Report
    Exhibit 4.36.5-5 Sample Minimum Refund Report
    Exhibit 4.36.5-6 Sample Modified Expedite Refund Report
    Exhibit 4.36.5-7 Sample Supplemental Report
    Exhibit 4.36.5-8 Sample Foreign Sales Corporation (FSC) Report
    Exhibit 4.36.5-9 Sample Large Deficiency Case Report
Exhibit 4.36.5-1

Outline and Format of Joint Committee Reports

All amounts should be rounded off to the nearest dollar and standard abbreviations may be used throughout. The format is subject to change by the Joint Committee on Taxation from time to time as a result of experience, volume of cases, etc.

Right - Heading
  Symbols of office preparing report
  Geographic location of office conducting examination
  Report writer name and phone
  Any related Joint Committee cases
  Date of Report

First Paragraph
Reports will contain the identity of the taxpayer to whom the refunds or credits are payable or to whom tentative allowances were paid. In situations in which another entity has succeeded to the interests of the taxpayer by operation of law (e.g. bankruptcy, conservation of an estate, or dissolution), the report will be in the name of the person or entity entitled to the refunds or credits by operation of law with the name of the original taxpayer added to the title. (e.g., XYZ Corporation, Inc. successor in interest to ABC Company). Thus, the parent of a consolidated return group in a taxable year following a separate return year of a corporation in the group would not fall into the category of an entity entitled to a refund for that earlier separate return year by operation of law. Additionally, consolidated return reports are to include "and subsidiary" or "and subsidiaries" as part of the name of the taxpayer even though this terminology was not included as part of the name set forth on the tax return. All reports should also specify the SSN or EIN, city, and state of the taxpayer receiving the refund or credit.

Tabulation of Examination Results
Some or all of the following columns may be used:

Refunds or Credits
Year Deficiencies Proposed Refunds
Section 6405(a)		 Tentative Allowance
Section 6405(b)		 Net Refund
or Credits

Total
Foreign tax credit carrybacks that have been refunded erroneously by the IRS on the basis of Form 1139 should be reported as Section 6405(a) refunds. Any other refunds prematurely allowed should also be in the Section 6405(a) column.
** If more than one year is reported, all columns must be totaled.

Note:

The columns titled Section 6405(a) and Section 6405(b) should not be used unless the aggregate amount of the proposed refunds exceeds the jurisdictional threshold. The column titled "Deficiencies" should only be used if applicable.


Following Paragraphs
The following should be noted here:

  1. Proposed refunds and deficiencies for non reportable years should be noted here, as shown in the sample report.

  2. Unexamined source years. See IRM 4.36.3.7 , Reporting Prior to resolution of all Issues, for specific information.

  3. The primary reason(s) for the refunds.

  4. Reference to enclosed spreadsheets. See IRM 4.36 3.6.3 .

  5. Related taxpayers for which reports are being submitted concurrently.

  6. Prematurely allowed refunds or credits.

  7. Previously unreported refunds.

  8. A statement that the case is submitted under the unagreed case procedures (IRM 4.36.3.7.1) and that a supplemental report will be submitted if the remaining issues are resolved outside of court and it exceeds the jurisdictional threshold. If the final results indicate an overall refund/credit less than the jurisdictional threshold, a written notification is required to be made to the JCT.

Taxpayer History Section

The first paragraph(s), where appropriate, should include:

  1. Date of incorporation.

  2. Principal business activities and products.

  3. Changes in activities or products if pertinent to understanding the adjustments or causes of the overassessments.

  4. Description of stock ownership (closely held or publicly traded).

  5. The names or number of subsidiaries or affiliates.

  6. Explanation of structure and any changes in capital structure, mergers, or corporate acquisitions/dispositions.

  7. Causes for short taxable years.

The final paragraph briefly states the economic reason for any net operating loss, capital loss or other reason for refund or credit.

Prior Examination History

Prior examinations and Appeals settlements should be mentioned and complete copies (including all computation sheets and explanations of adjustments) enclosed with the report. If the actions have previously been reported to the JC, no copy is needed, but the report release date needs to be stated. If there was no prior examination, there will be a statement to that effect.

Current Examination Activity

This section should include:

  1. Claims and applications for tentative refund filed by the taxpayer, including the amounts and basis for filing. If there are numerous filings, they can be listed in an attachment.

  2. Explanation of a premature refund.

  3. Survey action by the examination team.

  4. Description of an enclosed examination report. It should be a complete copy, including:

    1. All computations.

    2. Forms 886-A or 5701.

    3. Any Private Letter Ruling, Technical Advice Memorandum, Field Service Advice, Appeals Audit Statement, Appeals Transmittal and Case Memorandum (ACM), report of Court Action, or Counsel Settlement Memorandum.

  5. Explanation of a jurisdictional refund that was not previously reported.

  6. If the case involves a change in accounting method or period, a copy of the permission to change.

  7. Whether it is a Large Corporate Compliance case.

  8. Whether there is a Power of Attorney on file and enclosed.

  9. The statute of limitations dates (regular and special) for each refund year and source year.

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Exhibit 4.36.5-2

Sample Regular Report

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Exhibit 4.36.5-3

Sample Short Form Report

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Exhibit 4.36.5-4

Sample Expedite Refund Report

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Exhibit 4.36.5-5

Sample Minimum Refund Report

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Exhibit 4.36.5-6

Sample Modified Expedite Refund Report

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Exhibit 4.36.5-7

Sample Supplemental Report

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Exhibit 4.36.5-8

Sample Foreign Sales Corporation (FSC) Report

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Exhibit 4.36.5-9

Sample Large Deficiency Case Report

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