4.36.5. Reports

(1) See IRM 4.36.1.1.1, Background.

(1) See IRM 4.36.1.1.2 , Authority.

(1) See IRM 4.36.1.1.3, Roles and Responsibilities.

(1) See IRM 4.36.1.1.4, Program Management and Review

(1) See IRM 4.36.1.1.5, Program Controls

(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.

(1) See IRM 4.36.1.1.7, Related Resources.

(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.

(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.

(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.

(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.

(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.

(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.

(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.

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

(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).

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

(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.

(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.

(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.

(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.

(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.

(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.

(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.

(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.