4.36.4. Joint Committee Review Team Procedures

(1) Purpose: This IRM section sets forth the duties of the Joint Committee Review (JCR) program and the procedures they follow.

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

(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.

(4) Program Owner: The LB&I Northeastern Compliance Practice Area

(5) Primary Stakeholders: Examination teams, taxpayers and the 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.

(1) If the JCR program cannot review because of technical, computational, or procedural errors, the Joint Committee Specialist (JCS) issues a Notice of Suspended Referral (NSR) to the examiner and examiner’s team manager.

(2) The following reasons are significant enough to issue an NSR:

1. Substantial error - SeeIRM 4.8.2.9.1.1, Substantial Error

2. Evidence of fraud or malfeasance - See IRM 4.8.2.9.1.2, Fraud or Malfeasance

3. Serious administrative omission - See IRM 4.8.2.9.1.3 , Serious Administrative Omissions

4. Unprocessable case - See IRM 4.8.2.9.1.4, Unprocessable Cases

5. Corrections favorable to the taxpayer - See IRM 4.8.2.9.1.5, Correction of Errors That Will Benefit the Taxpayer

6. Other

(3) The JCS contacts the examination team to discuss the identified concern prior to issuing the NSR.

(4) Every effort should be made by the examination team to resolve JCR inquiries informally. If the examination team requires more than 10 business days to resolve the JCR inquiry, an NSR and related Form 886-A, outlining the specific information requested, is issued.

(5) If the Further Consideration box is checked on the NSR, the case is a priority assignment and is to be worked by the examination team within 30 days.

(6) When an NSR is issued, the examination team updates the Examination Return Control System/Reporting Compliance Case Management System (ERCS/RCCMS) to remove Aging Reason Code (ARC) 027.

(7) The examination team provides a status report every 30 days to the JCS until resolved.

(8) When the NSR is ready to be returned to the JCS, the examination team resubmits the referral and attaches the NSR, signed and dated by the examiner and the examiner’s team manager. A written response to the issues and concerns noted on the NSR/Form 886-A is provided to the JCS. The examination team updates ERCS/RCCMS to add ARC 027.

(9) Disagreements between the examination team and the JCR program are elevated to the appropriate management official for discussion.

(1) Upon completion of the review of the JC case, the JCS:

1. Prepares the JC report. See IRM 4.36.5, Reports.

2. Completes and attaches Form 4081, Transmittal Memorandum - Joint Committee Case (except for the short-form report).

3. Submits the JC report for peer review.

4. After peer review, submits the JC report to the JCR manager for approval.

5. After JCR manager approval, the JCS submits the JC report, to the JCT. See IRM 4.36.5.8, Instructions for Submitting JC Reports to JCT.

(1) Inquiries from the JCT are considered congressional inquiries and are high priority. See IRM 4.36.3.9 , Inquiries on JC Cases.

(1) See IRM 4.36.3.10, Disclosure of Correspondence with the JCT.

(2) See IRM 4.36.4.11, Disclosure of Individual Information — Form 5482, Record of Disclosure.

(1) There are two situations that warrant the withdrawal of a report from JCT prior to issuance of the release letter:

1. Proposed adjustments reduce the net refund or credit below the jurisdictional threshold.

2. Proposed adjustments result in an unagreed case.

(2) The JCS contacts the JCT once a revised agreement (Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment, or equivalent), is secured. In requesting release of the case from JCT jurisdiction, the JCS provides the JCT the taxpayer’s information, discusses the adjustments, the taxable income or loss, and tax liability as finally determined.

(1) Closing agreements may not be signed by the approving IRS official prior to the issuance of a release letter by the JCT. See IRM 4.36.3.6.4.1 , Closing Agreements.

(2) JCS prepares a cover memo and forwards the closing agreement with any relevant documentation to the JCT. See Exhibit 4.36.4-1, Sample Closing Agreement Cover Memo.

(1) See IRM 4.51.4.7 , Fast Track Settlement and Joint Committee Cases.

(2) See IRM 4.36.3.6.4.1(2), Closing Agreements.

(1) Bankruptcy or receivership cases that exceed the jurisdictional threshold must be reported to the JCT. Overpayments or deficiencies are processed in accordance with the procedures outlined in IRM 4.27, Bankruptcy.

(2) For bankruptcy cases with short or expired statutes where the IRS did not timely file a proof of claim (POC) per IRM 5.9.13, Manual Proofs of Claim and Common Claim Issues, the JCS should submit a short-form report to JCT. The JC report includes a statement that the IRS did not examine the refund because the deadline was missed for the IRS to file a POC. See IRM 4.36.5.2.1.1, Short-Form Report.

(1) The JCT accepts reports on cases with Partnership Control System (PCS) links. If the final determination on the ILSC issues results in a refund or credit to the investor in excess of the jurisdictional threshold, the JCS will prepare a JC report for the ILSC issues even though the review of the TEFRA key case has not been completed. A supplemental report is only required if a pass-through adjustment is resolved, the unified TEFRA partnership proceedings are completed and the refund or credit to the investor is in excess of the jurisdictional threshold.

(2) The following language is included in the JC report for cases with open PCS links: 
The taxpayer(s) are involved in unified partnership proceedings.  If the resolution of the partnership/ proceedings results in an additional refund to the taxpayer(s) in excess of $2 million ($5 million for C corporations), an additional/supplemental report will be submitted. This report is being submitted prior to completion of the unified proceedings.

(3) The JCS informs the examination team of the JCT release letter and the potential requirement to resubmit the case for a supplemental report once a PCS link is resolved.   

(4) The examination team processes the case with open links. Examination teams with jurisdiction over the investor are responsible for resubmitting the case to the JCR program when a link is resolved, and the refund or credit is in excess of the jurisdictional threshold. A supplemental report is not required when the pass-through adjustment is resolved, the unified TEFRA partnership proceedings are completed, and the refund or credit to the investor is less than the jurisdictional threshold.

(5) For additional TEFRA guidance, see IRM 4.31.2.6, Field Agent Investor Case Procedures.

(6) If the taxpayer is entitled to a minimum refund in excess of the jurisdictional threshold, a JC report is prepared prior to completion of the pass-through examination. See IRM 4.36.3.7.1, Cases with Unagreed Issues - Minimum Refund.

(1) Tax information about individuals or aliens admitted to permanent U.S. residence provided to the JCT pursuant to IRC 6405 requires Privacy Act accounting on Form 5482, Record of Disclosure. See IRM 10.5.6.7.4, Form 5482 Procedure

(2) The JCS completes Form 5482 at the time the JC report is forwarded to the JCT.

(3) When completing the Form, Item 3, Record System Number, is 42.001 and Item 8, Privacy Act Provisions, should be (b)(9).

(4) The JCS shares Form 5482 with the examination team.