Internal Revenue Manual - 4.36.5 Reports

Part 4. Examining Process
Chapter 36. Joint Committee Procedures
Section 5. Reports

4.36.5.1 (08-15-2004)
Types of Reports

The following are the various types of reports that are submitted to the Joint Committee on Taxation (JCT):
1. Regular
2. Expedite
3. Modified Expedite
4. Supplemental
5. Foreign Sales Corporation (FSC)
6. Large Deficiency Case
7. Minimum Refund

4.36.5.1.1 (08-15-2004)
Regular Report

The Regular Report is outlined in Exhibit 4.36.5-1.
This report will be prepared:
1. by the Joint Committee Specialist after the review of a surveyed or examined case,
2. when the criteria for an Expedite Refund Report is not met (IRM 4.36.4.14), or
3. when a Modified Expedite Report has not been previously submitted for these years.

4.36.5.1.2 (08-15-2004)
Expedite Refund Report

The Expedite Refund Report is similar to the regular report, with the following exceptions:
1. It should be clearly marked "EXPEDITE REFUND" as shown in Exhibit 4.36.5–3 and
2. Submit an extra copy of page one of the report.
This report will be used:
1. After the case is surveyed or at the completion of the examination,
2. When there is an net unpaid IRC Section 6405(a) refund in excess of $2,000,000,
3. The conditions set forth in IRM 4.36.4.13 are met, and
4. The procedures in IRM 4.36.4.12 (Dummy File Procedures) can be used.
Not all years being reported may qualify for expedite treatment (i.e. expired statute of limitations). In those cases, those years which do not qualify must be identified in the report.

4.36.5.1.3 (02-15-2002)
Modified Expedite Refund Report

A Modified Expedite Refund Report is prepared only for those cases where the taxpayer has requested payment of the refunds prior to the completion of the examination or survey action and has furnished collateral for the amount of the requested refund and, if applicable, interest. (See IRM 4.36.3.6.3 and 4).
It should be clearly marked "MODIFIED EXPEDITE REFUND " as shown in Exhibit 4.36.5-4.
Processing is the same as for Expedite Refund Reports. Refer to IRM 4.36.5.7 for mailing instructions. Refer to IRM 4.36.4.14 for processing the refunds.

4.36.5.1.4 (08-15-2004)
Supplemental Report

The Supplemental report is similar to a regular with the following exceptions:
1. It should be clearly marked "SUPPLEMENTAL REPORT."
2. The body of the report should refer to the prior report, including the date of the previous report and, if applicable, the date the case was released by the Joint Committee on Taxation (JCT).
3. See Exhibit 4.36.5–6 for a sample report.
This report should be prepared when:
1. A minimum refund was previously reported and the unagreed issues have been resolved or
2. A tentative refund from unexamined source years was shown as a tabulation in a prior report. (Refer to IRM 4.36.5.5.1) or
3. A Modified Expedite Refund Report per IRM 4.36.5.1.3 was previously submitted to the JCT and the examination or survey of the claim has now been completed.
If the final examination results in a refund below the jurisdictional amount, no supplemental report is required. If the issues are unagreed, a supplemental report may be prepared by Appeals. In any event, the JCT must be notified of the final results of examination or Appeals. See IRM 4.36.4.5 and 6.
A supplemental report can be either a Regular or Expedite Refund Report.

4.36.5.1.5 (08-15-2004)
Foreign Sales Corporation (FSC) Report

In order to facilitate the process, the following procedures apply to refunds on FSC returns resulting from the adjustment of the allocation of income or expenses between the FSC and its domestic parent:
1. It should be clearly marked "FSC Case " .
2. The report should contain a brief explanation of the correlative adjustment(s) omitting lengthy background information.
3. No enclosures are required.
Exhibit 4.36.5-5 provides a sample report. Note: If expedite procedures apply, the report must be clearly marked " FSC EXPEDITE REPORT" and the statute of limitations must be included in the report.

4.36.5.2 (08-15-2004)
Large Deficiency Case Report

Under the provisions of IRC section 8023(a), the Service reports a number of deficiency cases to the JCT. Exhibit 4.36.5-7 contains an example of the format and language to be used.
Note the following items:
1. The report is addressed to the Chief of Staff, Attention Refund Counsel.
2. The reporting period (e.g. March or September and the year) is noted along with the taxpayer’s name, city, state and EIN/SSN.
3. The report is issued pursuant to the authority contained in IRC section 8023(a).
The power of attorney requirements of IRM 4.36.5.3 do not apply.

4.36.5.3 (08-15-2004)
Report Assembly

Refer to Figure 4.36.5-1 and Exhibit 4.36.5-9 for assembly of the report file that is sent to Joint Committee Program Analyst.
If the file contains attachments in addition to the spreadsheets and Power of Attorney, then dividers should be used to identify each attachment.
The attachments should be held together using a staple, fastener, or binder clip. Attachments should not be put into a binder or file folder, as they are more difficult to deliver to the Refund Counsel.
Figure 4.36.5-1
Assembly of All Joint Committee Reports
(Please put in this order)
1. Two copies of Form 4081 (No Form 3210)
2. For National Office use (Separate from Refund Counsel copies):
  Copy of report
  Spreadsheets
  Power of Attorney
  Copy of Security Agreement, Letter of Credit, etc. if applicable
3. For Refund Counsel:
  Extra copy of page one of report if Expedite/Modified Expedite Report - (DO NOT attach to other forms)
  Original Report (without plastic cover)
  Spreadsheets
  Power of Attorney
  Prior RARs and Appeals reports
  Current RAR
  Prior and current closing agreements
  Security agreement, letter of credit, etc. signed by taxpayer
  All AMT computations — include all years and source years
  Approval for change of accounting method**
  Other necessary documentation
  *Includes Forms 886-A or Forms 5701
  ** Form 3115 and memo from Chief Counsel

4.36.5.4 (02-15-2002)
Specific Items

Additional explanations for the following items are provided.

4.36.5.4.1 (02-15-2002)
Form 4081

Form 4081 must contain the following information:
1. Transmittal date
2. Taxpayer’s name and TIN
3. Years covered in the report
4. Mailing address of office submitting report
5. Report writer’s name, phone and fax number
6. Any additional information deemed necessary

4.36.5.4.2 (02-15-2002)
Years Covered in Report

The report should specify jurisdictional years (determined in accordance with the IRM 4.36.2.4) and other years affecting the refund or credit.

4.36.5.4.3 (02-15-2002)
Distribution of Copies

All reports will be prepared in quadruplicate and dated.
The report is distributed as follows:
1. Original and one copy to Joint Committee Program Analyst
2. One copy for the case file.
3. One copy retained by the Joint Committee Specialist Group.
4. An extra copy of page one for Expedite/Modified Expedite Refund Reports to JCT.

4.36.5.4.4 (02-15-2002)
Power of Attorney

Attach a copy of Power of Attorney (or equivalent) to both copies of the report sent to the Joint Committee Program Analyst.

4.36.5.4.5 (02-15-2002)
Spreadsheets

Spreadsheets for regular tax (Exhibit 4.36.3-1) and AMT/Environmental Tax (Exhibit 4.36.3-2) must be included with each report, unless it is a one-year case with no carryback. If the spreadsheets prepared by the examiner are inadequate, the Joint Committee Specialist will prepare replacement spreadsheets.
Additional spreadsheets should be prepared if the taxpayer has credits carried from numerous years. Separate spreadsheets should also be prepared for Foreign Tax Credits involving different categories or baskets.

4.36.5.4.6 (02-15-2002)
Discovery of Unreported Refunds

Upon discovering that a refund in excess of $2,000,000 has been refunded without a report to the JCT, a report should be prepared as soon as possible, regardless of whether the period of limitations has expired for the years in question. The failure to submit a timely report should be explained. An advisory memorandum should be prepared and sent to the appropriate Territory Manager.

4.36.5.5 (02-15-2002)
Special Situations

In the following special situations a Joint Committee report can be written prior to the Service completing an examination for a particular refund year.

4.36.5.5.1 (02-15-2002)
Tentative Refunds from Unexamined Source Years

If a report is already being written and the jurisdictional years have additional tentative refunds from unexamined source years, then:
1. The report will be submitted.
2. This paragraph will be added:
3. A tabulation of the tentative allowance carryback amounts will follow the above paragraph.
"Further, under IRM 4.36, 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 one year). Upon completion of such examination, these will be the subject of a supplemental reporting, provided the refund amounts satisfy the reporting requirements of IRC Section 6405."

4.36.5.5.2 (08-15-2004)
Cases with Unagreed Issues-Minimum Refund

If it is determined that the taxpayer is entitled to an IRC section 6405(a) refund, and there is an unagreed issue which will not reduce the section 6405(a) refund, then a Joint Committee report will be written. (See IRM 4.36.3.7.1)
The report should contain a brief statement as to the nature of the unagreed issues. Also, the report must state that the case is partially agreed and that 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.
When the unagreed issues are finally resolved, a supplemental report will be prepared and submitted to the JCT by Appeals. This report will provide an explanation of the resolution of the unagreed issues and any other pertinent information deemed necessary.

4.36.5.5.3 (02-15-2002)
Request for Refunds - Claims For Unexamined Source or Refund Years - Modified Expedite Refund

If a decision is made that the taxpayer qualifies for a refund prior to completion of the examination, then a Modified Expedite Refund Report will be written. See IRM 4.36.3.6.
The report should contain a brief statement as to the nature of the losses generating the refund and, if possible, the estimated completion date of the examination. (See Exhibit 4.36.5-4)

4.36.5.6 (08-15-2004)
Deficiency Case Instructions

Under the provisions of IRC section 8023(a), the Service will report a number of deficiency cases to the JCT.
Twice a year the Service submits reports on sixteen cases with the largest fully agreed deficiencies or defaulted statutory notices of deficiency closed by the examination function.
1. The agreed deficiencies are considered without regard to the fact that the taxpayers have filed or may file claims for refund for all or a portion of such deficiencies.
2. The deficiency cases should be restricted to the types of taxes reportable as refunds or credits under IRC section 6405 (e.g. taxes imposed under Chapter 32 or 45 would not be reported).
3. The cases reported should be deficiencies with respect to Form 1040, Individuals, Form 1041, Trusts, Form 706, Estates, or Form 709, Gift Taxes.

4.36.5.6.1 (08-15-2004)
Exceptions

The following types of deficiency cases willnot be considered for submission as deficiency case reports:
1. Cases sent to and considered by Appeals, or docketed in the Tax Court; cases where it is known that the deficiency years have been or will be reported to the Joint Committee on Taxation as part of an overpayment case; or Special Enforcement Program (SEP) cases.

4.36.5.6.2 (08-15-2004)
Reporting Periods and Dates

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 June 30 and December 31. For example, the reports for the period ending March 31, should be submitted on or before June 30.

4.36.5.7 (08-15-2004)
Mailing Instructions

All reports should be shipped via United Parcel Service express/overnight to the Joint Committee Program Analyst.

Internal Revenue Service
ATTN: Wendy Ryan
LM:PQA M-3-145
801 9^th Street, NW
Washington, DC 20001
If shipping by any other method, call the Joint Committee Program Analyst for instructions.

4.36.5.7.1 (08-15-2004)
Joint Committee Program Analyst Procedures

Upon receipt of the report, The Joint Committee Program Analyst will date stamp the two Forms 4081 and return one copy of the form to the Joint Committee Specialist Group.
The Joint Committee Program Analyst will perform a procedural review of each report. This will include: verifying the accuracy of the math in the tabulation section of the report, verifying the correct number of copies, ensuring that procedural requirements have been followed and the report is in the proper format.
The Joint Committee Program Analyst will enter data from the report into a database for control purposes and then forward the report to the JCT.
The Joint Committee Program Analyst will fax a copy of the release letter from the JCT to the Joint Committee Specialist Group.
For expedite reports, the original and one extra copy of the first page of the report will be forwarded to the JCT, where it will be date stamped upon receipt and returned to the Joint Committee Program Analyst. Upon return, a copy of the first page will be faxed to the Joint Committee Specialist Group, and the Joint Committee Program Analyst will retain a copy for administrative purposes. The stamped date starts the thirty-day period that must elapse before an IRC section 6405(a) refund can be issued.

Exhibit 4.36.5-1 (08-15-2004)
Format of Joint Committee Reports

General Information

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

Exhibit 4.36.5-2	Regular Report
Exhibit 4.36.5-3	Expedite Refund Report
Exhibit 4.36.5-4	Modified Expedite Refund Report
Exhibit 4.36.5-5	FSC Report
Exhibit 4.36.5-6	Sample Supplemental Report
Exhibit 4.36.5-7	Large Deficiency Case Report
Exhibit 4.36.5-8	Sample Expedite (Minimum Refund)

All figures 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.

Heading

Right -	Symbols of office preparing report
	Geographic location of office conducting examination
	Report writer name, phone and fax number
	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. (For example, 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 service center on the basis of Form 1139 should be reported as IRC section 6405(a) refunds. Any other refunds prematurely allowed should also be in the IRC section 6405(a) column.

** All columns must be totaled. Totals must be double underlined.

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 amount. The column titled "Deficiencies" should only be used if applicable.

Following Paragraphs

The following should be noted here:

Proposed refunds and deficiencies for nonjurisdictional years should be noted here, as shown in the sample report.
Unexamined source years. See IRM 4.36.3.7 for specific information.
The primary reason(s) for the refunds.
Reference to enclosed spreadsheets (IRM 4.36 3.6.4).
Related taxpayers for which reports are being submitted concurrently.
Prematurely allowed refunds or credits.

Taxpayer History Section

The first paragraph (where appropriate) should include:

Date of incorporation.
Principal business activities and products.
Changes in activity or products if pertinent to understanding the adjustments or causes of the overassessments.
Description of stock ownership (closely held or publicly traded).
The names or number of subsidiaries or affiliates.
Explanation of structure and any changes in capital structure, mergers, or corporate acquisitions/dispositions.
Causes for short taxable years.

The second paragraph briefly states the economic reason for any net operating loss or capital losses.

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 Joint Committee, no copy is needed, but the report clearance date needs to be stated. If there was no prior examination, there will be a statement to that effect.

Where a year is included in a report solely because of a refund resulting from the carryback of investment, foreign tax, or other credit from another year included in the report and the carryback is less than $250,000, the examination history of that year need not be set forth in the report.

Current Examination Activity

This section should include:

Claims filed by the taxpayer, including the amounts and basis for filing. If there are numerous claims, they can be listed in an attachment.
Survey action by the examiner.
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.
Explanation of a jurisdictional refund that was not previously reported.
If the case involves a change in accounting method or period, a copy of the permission to change.
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 meets the jurisdictional amount. If the final results indicate an overall refund/credit less than the jurisdictional amount a written notification is required to be made to the Joint Committee on Taxation.
Whether it is a Coordinated Industry case.
Whether there is a Power of Attorney on file and enclosed.
The statute of limitations dates (regular and special) for each refund year.