- 8.7.9.7 JC Reports: Types, Format, Assembly and Mailing
- 8.7.9.8 Computations Prepared by the Tax Computation Specialist (TCS)
- 8.7.9.9 Communication Between JCT Staff and Appeals
- 8.7.9.10 APS Processing After JC Clearance
- 8.7.9.11 Other Research/Information Resources
- Exhibit 8.7.9-1 Appeals Joint Committee Case Report Package Checklist
- Exhibit 8.7.9-2 Sample of Request for Expedited Refund
- Exhibit 8.7.9-3 Sample of Joint Committee Report
- Exhibit 8.7.9-4 Sample of Supplemental Joint Committee Report
- Exhibit 8.7.9-5 Sample of Joint Committee Deficiency Case Report
- Exhibit 8.7.9-6 Sample of Request for Expedited Refund on Unexamined or Unsurveyed year(s) — Modified Expedite Refund
- Exhibit 8.7.9-7 Sample of Joint Committee Estate Tax Case Report
- Exhibit 8.7.9-8 Sample Letter 1594(CG) - JC Submission
- Exhibit 8.7.9-9 Sample Letter 1537(CG) - JC No Exception
- Exhibit 8.7.9-10 Information for Joint Committee Letter with IRC 6405(a) and 6405(b)
- Exhibit 8.7.9-11 Taxable Income and Tax Liability Spreadsheet Information
- Exhibit 8.7.9-12 Joint Committee Spreadsheet for Regular Tax
- Exhibit 8.7.9-13 Joint Committee Spreadsheet for Alternative Minimum Tax
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Normally, a report to the JCT cannot be submitted prior to the examination or the survey after assignment of carryback year(s) and source year(s) pertaining to the refunds being reported. While it is extremely unlikely this will occur in Appeals, in the event it does, a Modified Expedite Refund Report may be submitted prior to the examination or survey after assignment of the source or refund year(s) provided:
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The claimed IRC 6405(a) amount originating in an unexamined and unsurveyed year is large enough to require JCT review, and examination or survey of the year will not be completed within six months.
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The report must set forth the usual information required for an expedite refund request report. In addition, note the anticipated starting and completion dates for the examination or survey; whether there is sufficient time on the statute of limitations to complete the examination; and the reason for granting the refund prior to examination or survey (e.g. refund requested by the taxpayer and no disadvantage to the government).
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The taxpayer posts bond or similar security for the amount of the refund and related interest. Refer to instructions for the receipt and processing of bonds and similar collateral in IRM 5.6.1, Collateral Agreements and Security Type Collateral.
Note:
These procedures are an accommodation to taxpayers and are not statutorily required.
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A supplemental report is forwarded to the JCT after completion of the examination of the source or refund year(s) by the responsible office. See IRM 8.7.9.5.1.3. Compliance should send a supplemental report to the JCT after it surveys an unexamined year so that the JCT can close its control of the case.
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The refund to the taxpayer under this procedure will be made if the JCT does not respond in writing within 30 days after receipt of the request for expedited refund. ( See IRM 8.7.9.7.1.1.)
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The bond or other security will be released after the JCT clears the supplemental report.
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Where one or more refund years are in the Compliance function and one or more are in Appeals, the two offices should coordinate before either submits an expedited refund report to the JCT.
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The taxpayer is required to post a bond or other similar security for the amount of the refund as a condition for submitting a Modified Expedite Refund Report. See Exhibit 8.7.9-6. The Appeals Director, Field Operations is responsible for determining the sufficiency of the collateral. Refer to IRC 7101, the Regulations thereunder and IRM 5.6, Collateral Agreements, for further guidance. At the discretion of the Appeals Director, Field Operations, an additional amount of bond or security may be required with respect to interest on the refund in the event all or part of the refund must be repaid. This amount should be measured by the reasonably anticipated time to complete the examination and the interest rate currently in effect under IRC 6621. The posting of the bond must be accomplished prior to the submission of the Modified Expedite Report to the JCT.
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A security agreement is also required to be drafted. A copy of the security or collateral agreement executed by the taxpayer must be submitted with the Modified Expedite Refund Report. The agreement should reflect the amount of the proposed refund, plus previously assessed interest, if any, and estimated refund interest, if required. The agreement must be executed by the taxpayer prior to submission. Upon expiration of the 30-day period after submission of the report, the Appeals Director, Field Operations having jurisdiction over the case should execute the agreement on behalf of the Service. Coordination with Counsel in the development of the security agreement is required. The refunds must not be released until the JCT notifies Appeals that the appropriate documents may now be executed and such action has been taken.
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Any security or collateral agreement needs to specify that in fully agreed cases the agreement will not terminate until the JCT determines (if required by law) that it has taken no exception to the results of the examination. Note that any deviation, modification or revision to the sample security agreement must be approved by Counsel.
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See Exhibit 8.7.9-6. This exhibit contains an example of Modified Expedite Refund Request.
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See IRM 4.36.3.7.3,Request for Refund – Claims from Unexamined Source or Refund Years – Modified Expedite Refund Report, and IRM 4.36.3.7.4, Posting of Security (Modified Expedite Refund Report), for additional information on modified expedite refund requests. See IRM Exhibit 4.36.3-3 for a sample security agreement and IRM Exhibit 4.36.3-4 for procedures for cases involving claims for unexamined source or refund years.
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In the report to the JCT, cover only years affecting a refund or credit. For example, if, in the consideration of the years 1995 through 1998, a net operating loss for 1998 is carried back to, and fully absorbed in, 1995 and adjustments are made in 1996 and 1997 which do not relate to the cause of the refund or result in overassessments, do not cover the intervening years 1996 and 1997 in the report. Although the adjustments for these years are not covered, include in the JC report, a tabulation of the deficiencies and non-reportable refunds or credits determined. All source years of credits or losses that affect a refund or credit year must also be included in the report. See IRM 8.7.9.5.1. See IRM 8.7.9.7.1.
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If a year under JC jurisdiction has been surveyed or examined but not appealed, attach a copy of the RAR or survey report to the JC report .
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A net deficiency year(s) not related to a net overpayment year may, with certain exceptions, be separated and disposed of without referral to the JCT. Defer processing of "separated" year(s) if the year(s) are subject to agreements or stipulations conditioned upon review of overpayments. In addition, the separate processing of an intervening (interposed between overpayment and/or loss year(s)) net deficiency year is ordinarily limited to a year where there is no significant item likely to affect either an overpayment year or a loss year and where there are compelling reasons for separate processing. Where a significant factual presentation would be incomplete without the intervening year, include such year in the report to the JCT.
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The following subsections regarding format apply to all JC reports. There are a couple of exceptions to the general format. See IRM 8.7.9.7.1.1. See IRM 8.7.9.7.1.4.
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The JC report should also reflect the names of related JC cases (if any) that should be simultaneously reviewed by the JCT because a change in one case may affect the tax in the related case. This should appear on the first page of the report in the header section. See Exhibit 8.7.9-3.
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In addition to the taxpayer's name, all reports should also specify the SSN or EIN, city, and state of the taxpayer receiving the refund or credit.
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The introduction area should include a table which lists deficiencies, refunds and credits under IRC 6405(a), IRC 6405(b) and IRC 6405(c) and net refunds and credits. Use only those columns that are appropriate for the case (e.g. if there is no IRC 6405(a) refund, do not include that column in the table). Also, include a brief general statement regarding the basis for the refunds and credits.
Note:
The TCS will provide the information needed for the table. This information will be included in the administrative file as an exhibit that will be used by the AO or ATCL assigned the case to prepare the JC report. See IRM 8.7.9.8.1.
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Also include a brief general statement regarding the basis for the refunds and credits. This is particularly important when carrybacks and carryovers are not the basis for the refunds and credits. Do not show net deficiency years and amounts and do not show IRC 6405(a) refunds with an aggregate total of less than $2,000,000 in this table. Rather, they should be discussed in the paragraph of the report following the tabulation. Where the proposed overpayment of tax is less than $2,000,000, the report should explain why there is JC jurisdiction (e.g., that previously assessed interest or penalty of a certain amount will be refunded, causing the total overpayment to exceed $2,000,000).
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The explanation of the basis for refunds or credits follows the tabulation section. To the extent refunds or credits result from carrybacks and carryovers, list net operating loss deductions first, followed by listings of capital losses, additional investment credits, additional foreign tax credits, and additional work incentive credits.
Note:
The TCS will provide this information in an exhibit in the administrative file. The AO or ATCL assigned the case will use this exhibit to prepare the JC report. See IRM 8.7.9.8.1.
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A statement should be included indicating that an attached spreadsheet reflects the taxable income and tax liability reported on the returns and as finally determined prior to allowance of the net operating loss deduction.
Note:
The TCS will prepare this spreadsheet. See IRM 8.7.9.8.2.
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All table columns should be TOTALED. Round off amounts to the nearest dollar in the report.
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Include a brief statement on the nature of the taxpayer's business and the economic reasons for the overpayment.
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In any case involving consolidated returns, the JC report should be prepared in the name of the affiliate to which the refund is to be paid. If the refund results from a carryback or carryforward to a consolidated return year, or is a refund for a consolidated return loss year, the JC report should reflect the name of the common parent for the group for the refund year, with the addition of the words "and Subsidiaries" to alert the JCT that it is dealing with consolidated returns. Any reference to an affiliated corporation should disclose, with the initial mention of that corporation, the degree of affiliation and whether that firm is a member of the consolidated return group for any of the years affecting the JC report.
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If the refund is a tentative carryback adjustment to a separate return year and is payable under Treas. Regs. section 1.1502–78(c), ex. (4) to the subsidiary to which the loss or credit is apportioned under Treas. Regs. Section 1.1502–79, the report should be prepared only in the name of that subsidiary, but should contain the customary report on the source year of the loss or credit, including information identifying the consolidated loss or credit year(s), the name of the common parent of the group, the amount of the total loss or credit for each year, and the amount or amounts allocable to the subsidiary to which the refund is to be paid.
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In any case in which a refund or tentative allowance is to be paid to an affiliate other than the one to which the loss or credit is attributable (other than refund or tentative allowance resulting from a carryback or carryforward from one consolidated return year to another consolidated return year of the same group), the report should state the reason or authority for payment to the other affiliate. For example:
Treas. Regs. section 1.1502–78(c), ex. (3), states that any tentative carryback adjustment from a separate return year to a consolidated return year is to be paid to the common parent of the group in the carryback year.
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This subsection covers the assembly of JC Reports.
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See Exhibit 8.7.9-1. This is a checklist to aid in the assembly of the report package.
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The first page of the JC report is prepared on official letterhead. Plain bond is used for subsequent pages. Additional reproduced copies may be made as needed.
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A certain format should be used for the heading, address, salutation, body, and signature on all reports with the exception noted for the Large Deficiency Case Report. See Exhibit 8.7.9-3. See IRM 8.7.9.7.1.4. The JC report should be dated when signed as directed by Delegation Order 4-18 (formerly DO 154, Rev. 10). The date should appear on the first page.
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The following should be attached to the report:
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Spreadsheet (prepared by the TCS) reflecting the taxable income and tax liabilities reported on the returns and taxable income as finally determined prior to allowance of the net operating loss deduction. See IRM 8.7.9.7.3.2.
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Spreadsheets (prepared by the TCS) for regular tax and AMT/environmental tax, unless one-year case with no carrybacks. Additional spreadsheets as necessary (e.g., credits from several years or different categories of baskets for foreign tax credit purposes) may be required. See IRM 8.7.9.8.2.
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A copy of the power of attorney if applicable.
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A copy of any cited document(s) such as a technical advice memorandum, action on decision, prior appeals case memo, any document(s) cited in a prior appeals case memo which explains issues currently under JC review, etc. Be sure to include office memoranda, private letter rulings, general counsel memorandum, and other Headquarters Office documents relied upon in settling the case. Do not forward published documents such as revenue rulings.
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One copy of Form 870/870–AD or Form 890/890–AD and one copy of the Appeals Case Memorandum (ACM) along with the Form 5402, Appeals Transmittal Memorandum and Case Memo, and settlement computation. Requirements for Closing Agreements are covered in a previous subsection. See IRM 8.7.9.5.6. DO NOT SEND ORIGINAL AGREEMENT FORMS OR CLOSING AGREEMENTS.
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A copy of any agreements (e.g., merger agreements, buy-sell agreements) involving those issues over $100,000 which are being reported.
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Attachments should be held together by staple, fastener, or binder clip. Attachments should not be placed into a binder or file folder
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When the JC report is received by APS, along with the case file and approved Form 5402, Appeals Transmittal and Case Memo, process Form 5403, Appeals Closing Record, for assessment of any agreed deficiency which does not require JC review. Use "copy of return" procedures and process as an interim quick assessment. See IRM 8.20.6, Interim Actions - Remittances, Partials, Transfers, and Returns.
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After processing any necessary partial assessments, assemble the JC file to be mailed per the instructions in the previous subsection. See IRM 8.7.9.7.4. See Exhibit 8.7.9-1.
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If there is a Form 5284, Record of Disclosure, keep the copy with the administrative file. The original will be forwarded with the JC case package. See IRM 11.3.19 and IRM 11.3.37. See IRM 8.7.9.5.8.
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Keep a copy of the JC report and the Form 4081 in the office file.
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Send the Letter 1594(CG) prepared by the AO or ATCL assigned the case to notify the taxpayer that a report has been forwarded to the JCT. The letter should be send by first class mail to the taxpayer or representative.
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Retain the case file in APS pending completion of JC review.
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After the report is signed and dated, forward the original and one copy of the signed and dated JC report along with the original Form 5482, Record of Disclosure (if applicable), and the original and one copy of Form 4081, Transmittal Memorandum—Joint Committee Case . The Form 4081 should include the contact name, telephone and fax numbers and return mailing address. Also, include a self-addressed stamped envelope. Be sure to use correct, up-to-date office symbols and locations. DO NOT use Form 3210, Document Transmittal, for transmittal of a JC report. (Enclose an additional copy of page one of the JC report for expedited refund requests.)
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The fax number should be shown on Form 4081 for purposes of forwarding the JCT clearance letter to the Appeals Office.
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A self-addressed envelope should be included with the package. The Appeals JC Program Analyst will return an acknowledgement copy of the Form 4081 to the Appeals Office in this envelope.
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The original JC report should have all attachments. See IRM 8.7.9.7.4.2. However, the only attachments needed with the copy of the JC report are the spreadsheets and POA. The above instructions apply to all JC reports (i.e., expedite, regular, supplemental and large deficiency case reports) except for large deficiency case JC reports which were discussed in a previous subsection. See IRM 8.7.9.7.1.4.
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The Form 4081 is addressed the same as the envelope mailing address. The JC report address is similar, but different from the mailing address because the report address includes the appropriate title for the Joint Committee on Taxation ("The Chairman" for regular, expedite and supplemental reports and "Chief of Staff" for large deficiency case reports). See IRM 8.7.9.7.7.1.
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Following submission of a report to the JCT, the AO or ATCL named in the report as the person to be contacted for additional information should keep a copy of the JC report and any related papers such as the ACM and the examiner's report until notified that the JCT has released the case.
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Generally, the JCT does not return any submitted information back to Appeals once they have completed their review of a case. Therefore, if you should provide the JCT with any case related item, document, file etc., such as an original agreement form or the return, which is vital to processing and closing the case, you should either:
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determine if the JCT staff can work from a copy for any additional information which might be provided to the staff prior to submitting the report; or
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when submitting the original document, attach a request that it be returned and to whom and where it should be return.
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This subsection covers Mailing Addresses for JC Reports.
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Address to be used on mailing/shipping envelope and Form 4081:
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Internal Revenue Service - Appeals
Attn: Wendy Ryan
AP:TS:TPP(Exam)
1099 14th Street, NW, Suite 4200E
Washington, DC 20005Note:
Ship JC package by UPS/FedEx overnight delivery service using the above address. DO NOT use US Postal Service.
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Address to be used on JC report/letter:
The Chairman (substitute "Chief of Staff" for "The Chairman" in the deficiency reports)
Joint Committee on Taxation
c/o Internal Revenue Service
Attn: Wendy Ryan
AP:TS:TPP(Exam)
1111 Constitution Avenue, NW
Washington DC, 20224
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The usual settlement computations, notice of deficiency statements, etc. must be prepared in JC cases by the TCS. Form 5278, Statement - Income Tax Changes, is required for JC cases.
Note:
AMT schedules generated by the BNA or RGS programs must be included with the Joint Committee computations for all years. If there is no actual AMT tax liability, RGS will sometimes not generate an AMT schedule. If this happens, corrected Form 6251, Alternative Minimum Tax - Individuals, Form 4626, Alternative Minimum Tax - Corporations, should also be included with the Joint Committee computations.
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In addition, the TCS will be requested to prepare computations to assist the AO or ATCL in the preparation of the JC report, as discussed below:
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Information for the JC report. See IRM 8.7.9.8.1. - The TCS will provide the information the AO or ATCL will include in the JC report. There are two exhibits provided to illustrate an example of the JC computations required. See Exhibit 8.7.9-10. This exhibit involves a case with a deficiency and an IRC section 6405(b)refund.
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Attachments to the JC report. See IRM 8.7.9.8.2. - The TCS will also prepare exhibits and spreadsheets for the AO or ATCL to attach to the JC report. See Exhibit 8.7.9-11. See Exhibit 8.7.9-12. See Exhibit 8.7.9-13.
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for another example illustrating the JC computations required. This example has IRC 6405(a)and IRC 6405(b) refunds.
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For procedures where the taxpayer’s return involves both TEFRA and non-TEFRA issues, see IRM 8.7.9.5.1.1.
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Computations will be prepared by the TCS to determine jurisdictional limits under IRC 6405(a), IRC 6405(b), and IRC 6405(c) as follows:
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Prepare a table listing the deficiencies, refunds, and credits under IRC 6405(a), IRC 6405(b), and IRC 6405(c) and net refunds and credits. Include the table in the administrative file as an exhibit that the AO or ATCL assigned the case will use to prepare the JC report. These exhibits provide spreadsheets to facilitate the computations.
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Foreign Tax Credits (FTC) carrybacks that have been erroneously refunded by the Campus on the basis of Form 1139, Corporation Application for Tentative Refund, should be reported as IRC 6405(a) refunds. Any other refunds prematurely allowed should also be included in the IRC 6405(a) column of the table.
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The JC report must specify the basis for refunds or credits. So to the extent refunds or credits result from carrybacks and carryovers, the TCS will list net operating loss deductions, alternative tax net operating loss deductions, capital loss carrybacks and credit carrybacks in an exhibit.
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Include this information in the administrative file as an exhibit which will be used by the AO or ATCL assigned the case to prepare the JC report.
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The TCS will prepare an exhibit reflecting the taxable income and tax liabilities reported on the returns and taxable income as finally determined prior to allowance of the net operating loss deduction.
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TCS will prepare a spreadsheet for regular tax.
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Additional spreadsheets should be prepared as necessary (e.g., credits from several years, different categories of baskets for foreign tax credit purposes, etc.).
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For cases with life/non-life insurance groups, spreadsheets should be modified to include separate columns for the life insurance groups and the non-life insurance groups.
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A one year case with no carrybacks does not require these spreadsheets.
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The TCS will also prepare a spreadsheet for AMT/Environmental tax whether or not AMT applies.
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An Excel spreadsheet for regular tax is included on the Appeals TCS web site at http://appeals.web.irs.gov/taxcomput/Default.htm.
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The LMSB Joint Committee web site has Excel spreadsheets for corporate and individual regular tax, AMT/Environmental tax, and life insurance cases located at http://lmsb.irs.gov/hq/pqa/Joint_Committee/index.asp.
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The LMSB Joint Committee web site at http://lmsb.irs.gov/hq/pqa/Joint_Committee/index.asp also has a tutorial on how to prepare the regular tax JC spreadsheet.
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If Appeals closes a JC case without waiting for a loss/unused credit year to be examined, and a carryback from that loss/unused credit year is provisionally allowed, the settlement computation should contain the following modification:
"The net operating loss deduction or other loss or credit carryback reflected herein which gave rise to the tentative allowance of $________ is provisionally allowed and is subject to change upon examination of the returns of the loss year or unused credit year."
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See IRM 8.7.9.5.1.3.
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For any refund or credit where expedited refund procedures are applicable, include the following paragraph in the settlement computation:
"Any refund or credit contained in these findings may be assessed as a deficiency without issuing the notice referred to in IRC 6212(a) and collected if the Service should redetermine tax liability after Joint Committee review."
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See IRM 8.7.9.7.1.1.
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This subsection covers Communication between JCT Staff and Appeals.
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Requests by a JCT staff attorney for clarification of statements in JC reports and related questions, which can be answered by the person identified in the report as the Appeals contact, may be resolved by telephone or E-mail if initiated in such manner. Because of the lack of explanations of adjustments in the report, JCT staff attorneys may be in frequent telephone contact to clarify items appearing in the report. Appeals should cooperate with the staff attorneys to the fullest extent to resolve questions over the telephone or by E-mail. E-mail responses should be encrypted. The taxpayer's name should only appear in the body of the message. Do not use the taxpayer's name in the "Subject" line.
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Normally, this type of response does not involve a significant delay and will not require contact with the taxpayer. A premature contact with the taxpayer could convey the impression that the JCT is having serious problems with reviewing and clearing the JC report. However, see (4)(d) and (4)(e) below, if a lengthy delay may be involved.
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If additional information is necessary, the JCT may prepare an informal memorandum which will be sent directly to the local appeals office for response and appropriate action. Replies should be sent to the Appeals Area Director for his/her approval. The approved response should be sent directly to:
Refund Counsel
Joint Committee on Taxation
Room 3565, I.R.S. Building
1111 Constitution Ave., NW
Washington, DC 20224
A copy of the reply should be sent to the Chief, Appeals, C:AP and the Appeals JC Program Analyst. -
The JCT sends a copy of all Staff Review Memoranda (SRMs) on Appeals cases to the Appeals JC Program Analyst who, in turn, will send them to the Staff Assistant to the Chief, Appeals, who determines the necessary action. If action is required from an office, function, or area appeals office, the Chief, Appeals, requests the additional information or documents from the appropriate office. See Delegation Order 4-18 (formerly DO 154, Rev. 10).
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Address replies to the SRM to the Chief, Appeals, C:AP, who will incorporate the reply into the response to the JCT. The responses to the Chief, Appeals, may be transmitted electronically.
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In general, the JCT may express concern regarding an Appeals settlement but approve the release of the proposed refund request under the appropriate circumstances. After a refund is released and notification of such release is received by Appeals, the Appeals office may close or process the case. When addressing a response to a JCT SRM (in which the proposed refund has been released), the area should include a copy of the Form 5402, the ACM, the settlement computation, and any closing agreements which the JCT has returned to Appeals.
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If a notice of deficiency or a statutory notice of claim disallowance is issued as a result of a SRM, forward a copy of the notice to the JCT through the Chief, Appeals. Similarly, if the taxpayer signs a waiver of statutory notice of claim disallowance, follow the same procedures.
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If the processing of the JC report is delayed, the AO or ATCL assigned the case should inform the taxpayer of the reasons for the delay and provide periodic updates. The time, method, and nature of the information to the taxpayer is discretionary.
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If contact with the taxpayer is necessary to respond to a JCT request, the taxpayer should be informed of the reason when contacted by Appeals. However, in no event should the taxpayer be told that the JCT has a question. Any inquiry should be presented as the Service reconsidering its position.
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If Appeals requests, on its own initiative, withdrawal of a report from JC consideration, the request should be sent to the Chief, Appeals, attention: Appeals JC Program Analyst. An example of a request for withdrawal from JC consideration is a case coming under Department of Justice jurisdiction because suit for refund has been filed in the United States District Court.
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If the views of the JCT expressed in a formal or informal request are adopted by Appeals and result in adjustments (or proposed adjustments) which reduce the proposed refund or credit to $2,000,000 or less, the case will still be under JC jurisdiction. In this case, submit a supplemental report explaining that the refund is now below the jurisdictional amount and wait for JC clearance of such report. It cannot be withdrawn. If a notice of deficiency is prepared, follow procedures contained in prior subsection. See IRM 8.7.9.5.9.4.
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Any agreed deficiency should have been assessed at the time the report was sent to the JCT.
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After the JCT has completed its review of the case, the AO or ATCL listed as the contact person on the Form 4081 will receive a copy of the JC clearance letter either by FAX or electronically by E-mail . The FAX or electronic copy will be the only notification received.
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The following action should be taken when reviewing the FAX copy of the clearance letter included in the administrative file received for closing:
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Compare the taxpayer's name on the retained copy of the JC report to the clearance letter. The name on the clearance letter should match exactly with that on the retained report.
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Keep the FAX or printed copy from the electronic file of the JC clearance letter in the closed office file and the administrative file.
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Prepare Form 5403 to close to AIMS:
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Item 12 - process adjustments cleared by the JCT and not previously processed.
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All partial assessments or manual refunds should be incorporated in the Item 800/801 amount. All other items on the Form 5403 are completed as usual.
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Assign to an APS employee on PEAs.
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ACDS will be closed following general closing instructions and will include final processing of adjustments and update of appropriate systems
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On each Form 5402 and copy, make an appropriate notation that "Joint Committee’s clearance letter dated -----," and distribute Form 5402.
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Date and mail the notification letter ( Letter 1537(CG)) informing the taxpayer of completion of JC consideration.
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Prepare the closed office file as outlined in IRM 8.20.7, Appeals Office File Management.
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Process the case for closing after receipt of the FAX copy of the JC clearance letter. See IRM 8.7.9.10.1.
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In addition, forward the file to Counsel for processing of the stipulation. Update ACDS:
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ACTION = STIPFF
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TODATE = date case was sent to Counsel
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After receiving the case file from Counsel indicating the date that the stipulation was filed with the Tax Court, continue closing the case. See IRM 8.7.9.10.1.
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This subsection provides guidance for processing an examined carry back year that is not currently reportable to the Joint Committee but with the potential requirement for Joint Committee review after examination of the source year of the carry back.
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The "Remarks" section of Form 5402 prepared by the Appeals Officer or ATCL should indicate the case may require JC review after examination and verification of the loss/unused credit carryback and that the file, returns, and workpapers are transferred to the examination group for association with the loss/unused credit year.
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Indicate that the responsibility for the period of limitation is transferred to Compliance.
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Request acknowledgement by the return of a date-stamped copy of Form 5402.
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Instruct Compliance (on the Form 5402 or Form 3198, Special Handling Notice) to retain the file, returns, and workpapers for associate with the loss/unused credit year. Identify the loss/unused credit year on Form 3198 or otherwise flag it.
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Instructions should be included for Compliance to request the loss/unused credit year if it is not already under examination. Enter "Follow Instructions Per form 3198" in Item A, Form 5403.
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Close the case on ACDS following general closing instructions.
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Assessments and overassessments in the carry back years should be made but IRC 6405 refunds or credits resulting from overassessments cannot be scheduled in view of the potential requirement for Joint Committee review of such proposed refunds or credits.
Note:
Under IRC 6405(b) and IRC 6405(c), tentative refunds under IRC 6411 and disaster loss refunds under IRC 165(i) will be made prior to submitting a report to Joint Committee. IRC 6405(b) and IRC 6405(c) refunds are reported to Joint Committee when the correct amount of tax is determined. IRC 6405(b) and (c) refunds will likely have been paid prior to reaching Appeals. However if not, any overassessments attributable to tentative refunds and disaster loss refunds should not be frozen. See IRM 8.7.9.10.3.
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In cases in which IRC 6405(a) overassessments are to be processed, Appeals will enter Hold Code 1 in Item 07 of Form 5403. This places a freeze condition on the account and prevents the issuance of a refund to the taxpayer.
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If the taxpayer requests, collection activity on related deficiencies will be withheld up to an amount equal to the "frozen" refund. To withhold collection of a deficiency, enter Hold Code 3 in Item 07 of Form 5403. Note Item A "Withhold Refund" or "Withhold Collection" .
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If the deficiency is greater that the amount of the "frozen" refund, a partial assessment will be processed prior to the "final" closing of the case (in cases reportable to the JCT, final closing is after the source year of the loss or credit has cleared Joint Committee) so that the only deficiency amount remaining at closing will be equal to the amount of the "frozen" refund. For example, assume that the case to be closed contains three taxable years, 1988, 1999, and 2000, with a refund and deficiencies as follows:
-
Year Deficiency Refund 1998 $2,500,000 1999 $3,250,000 2000 $97,000
-
A partial agreement to a deficiency of $750,000 for the year 1999 should be processed in accordance with existing instructions prior to the "final" closing of the case. The agreement form secured for the "final" closing of the case will, therefore, reflect an overassessment of $2,5000,000 for the year 1988, a deficiency of $2,5000,000 for the year 1999, and a deficiency of $97,000 for the year 2000.
-
Hold Code 1 will be shown in Item 07 of Form 5403 for the 1988 year to freeze the refund of $2,500,000.
-
Hold Code 3 will be shown in Item 07 of Form 5403 for the year 1999 to withhold collection activity on the remaining $2,500,000 deficiency for that year.
-
No Hold Code will be shown for the deficiency of $97,000 for the year 1990, which should be assessed and collected.
-
-
Compliance JC website - http://lmsb.irs.gov/hq/pqa/Joint_Committee/index.asp
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Appeals JC website - http://appeals.web.irs.gov/tech_services/Joint_Committee/JC.htm
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House of Representatives Joint Committee website - http://www.house.gov/jct
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Compliance IRM 4.36.1 through IRM 4.36.5
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Counsel IRM 35.5.4, Settlement Procedures - Settlement of Joint Committee Cases and IRM 34.8.2.8, Settlement Procedures- Settlement Procedures, Joint Committee Cases
-
TEFRA investor procedures - IRM 8.19.6.12
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Regulation 601.108
Assembly of Joint Committee Report Package | IRM Reference | Check Box | ||
---|---|---|---|---|
1 | Original and one copy of Form 4081 (Do NOT use Form 3210) |
8.7.9.7.6(1) | ||
2 | Original Form 5482 (if applicable)(Copy will remain with the administrative file) | 8.7.9.7.6(1) | ||
3 | Original and one copy of Joint Committee Report (Enclose an additional copy of page one of the JC report for Expedite Refund requests) |
8.7.9.7.6(1) | ||
4 | Attachments to the Joint Committee Report: | 8.7.9.7.4.2 8.7.9.8.2 |
||
a. | Spreadsheet reflecting taxable income and tax liabilities reported on returns and as finally determined prior to allowance of the net operating loss deduction | 8.7.9.8.2(1) | ||
b. | Regular tax spreadsheet | 8.7.9.8.2(2) | ||
c. | AMT spreadsheet | 8.7.9.8.2(3) | ||
d. | Additional spreadsheets as warranted (e.g. credits from several years or different categories of baskets for foreign tax credit purposes) | 8.7.9.8.2(2)(b) | ||
e. | Power of Attorney (NOT needed for report packages on large deficiency cases) | 8.7.9.7.4.2 8.7.9.7.1.4(1)(d) |
||
f. | Copy of any cited document such as technical advice memorandum, action on decision prior ACM, document cited in prior ACM which explains issue currently under JC review, etc. Be sure to include office memorandum, private letter rulings, general counsel memorandum, and other IRS Headquarter's Office documents relied upon in settling the case | 8.7.9.7.4.2(1)(d) | ||
g. | One copy of Form 870-AD/890-AD or one copy of Form 870/890 | 8.7.9.7.4.2(1)(e) 8.7.9.5.5 |
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If Form 870-AD/890-AD is used, the form is ordinarily modified by adding the following statement: "Accepted as of the date the Joint Committee on Taxation completes its review without objection or the date accepted for the Commissioner, whichever is later." |
||||
If Form 870/890 is used, the form is ordinarily modified by adding the following statement: "This agreement is submitted to take effect on the date the Joint Committee on Taxation completes its review without objection." |
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(Do NOT obtain Form 2297, Waiver of Statutory Notice of Claim Disallowance, until the JC has released the case unless the Form 2297 is modified as follows: "This waiver takes effect on the date the agreement form (fill in the appropriate form number) used in this case becomes effective.)" | ||||
h. | One copy of any closing agreement as to determination of tax liability; a determination covering specific matters; or a combined agreement (Do NOT execute any closing agreement prior to JC review and concurrence) | 8.7.9.7.4.2(1)(e) 8.7.9.5.6 |
||
i. | Form 5402, ACM with Schedule of Adjustment and settlement computation | 8.7.9.7.4.2(1)(e) | ||
j. | One copy of any agreements (e.g. merger agreements , buy-sell agreements) involving those issues over $100,000 which are being reported. | 8.7.9.7.4.2(1)(f) | ||
Addresses for Joint Committee Report Package | ||||
1. | Mailing address for envelope and Form 4081: | 8.7.9.7.7.1 | ||
a. | All reports: | |||
Internal Revenue Service Attn: Wendy Ryan AP:TS:TPP(Exam) 1099 14th St., NW - Suite 4200E Washington, DC 20005 |
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Send via UPS overnight. DO NOT use US Postal Service | ||||
2. | Address for Joint Committee Report Letters | 8.7.9.7.7.2 | ||
a. | Refund Report Letters | Exh. 8.7.9-2 through Exh. 8.7.9–6 |
||
The Chairman Joint Committee on Taxation c/o Internal Revenue Service Attn: Wendy Ryan AP:TS:TPP(Exam) 1111 Constitution Ave, NW Washington, DC 20224 |
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b. | Large Deficiency Case Report Letter | Exh. 8.7.9-7 | ||
Chief of Staff Joint Committee on Taxation c/o Internal Revenue Service Attn: Wendy Ryan AP:TS:TPP(Exam) 1111 Constitution Ave, NW Washington, DC 20224 |
||||
Joint Committee Reports | ||||
1. | JC Report should be dated and signed by ATM for AO cases or ATCL for ATCL cases (See Delegation Order 4-18) | 8.7.9.7.4.1 | ||
2. | Types of Reports: | |||
a. | Expedite Refund Report (See Exhibit 8.7.9-2) | 8.7.9.7.1.1 | ||
c. | Regular Refund Report (See Exhibit 8.7.9-3) | 8.7.9.7.1.2 | ||
d. | Supplemental Report (See Exhibit 8.7.9-4) | 8.7.9.7.1.3 | ||
e. | Expedite Refund on Unexamined or Unsurveyed Years - Modified Expedite Refund Report (See Exhibit 8.7.9-5) | 8.7.9.7.1.5 | ||
f. | Estate Tax Case Refund Report (See Exhibit 8.7.9-6) | 8.7.9.7.1.6 | ||
g. | Large Deficiency Case Report (See Exhibit 8.7.9-7) | 8.7.9.7.1.4 |
Internal Revenue Service Appeals Office (Office Location or address) Date: |
Department of the Treasury Person to Contact: (Name) Employee ID Number: Tel: Fax: Refer Reply to: (Contact Office Symbols) Related Case(s): (if applicable) |
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The Chairman Joint Committee on Taxation c/o Internal Revenue Service Attention: Wendy Ryan AP:TS:TPP(Exam) 1111 Constitution Avenue, NW Washington, D. C. 20224 |
||||
EXPEDITE REFUND | ||||
Dear Mr. Chairman: | ||||
As required by Section 6405 of the Internal Revenue Code, the following refunds or credits of Income taxes are reported in favor of Taxpayer Company, Inc. EIN xx-xxxxxxx, of City, State: | ||||
Years | Deficiency | Proposed Refunds Section 6405(a) |
Tentative Allowances Section 6405(b) | Net Refund or Credit |
1993* | $ 790,000 | $ 790,000 | ||
1994 | $ 500,000 | $27,450,000 | $27,450,000 | |
1995 | $1,275,000 | $54,325,000 | $53,050,000 | |
1996 | ________ | $2,100,000 | $12,425,000 | $14,525,000 |
Totals | $1,275,000 | $3,390,000 | $94,200,000 | $96,315,000 |
* The 1993 refund is not entitled to expedite treatment. Statute open solely on timely filed claim. (Use only if applicable) | ||||
In addition, there is a proposed refund in the amount of $ XXX,XXX for 19XX . (Use this sentence if applicable). | ||||
The refunds result primarily from the carryback of a net operating loss (NOLD) and unused investment credit. The taxable income and tax liability reported on the returns and the taxable income as finally determined prior to allowance of the NOLD are reflected on an attached spreadsheet. | ||||
Net operating loss deduction allowed: | ||||
Year | Amount | Carryback From | ||
1994 | $705,130 | 1998 | ||
1995 | $833,340 | 1998 | ||
1996 | $4,102,500 | 1998 | ||
Additional Investment credits: | ||||
Year | Amount | Carryback From | ||
1995 | $175,000 | 1998 | ||
The taxpayer manufactures, sells, and rents farm machinery. | ||||
The principal causes for the 1998 loss were the competition of foreign products, a prolonged strike by the production employees in 1998, the subsidiary's erroneous projection of research and development costs, and the market's demand for a new product. | ||||
RAR dated June 30, 2000 (1993 - 1995) RAR dated May 21, 2001 (1996) |
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Agreement was obtained by Form 870-AD waiver, a copy of which is enclosed. The overassessments are approved. | ||||
The periods of limitations are as follows: | ||||
Year | Original or as Extended* | |||
1993 | 12/31/2003* | |||
1994 | 12/31/2003* | |||
1995 | 12/31/2003* | |||
1996 | 12/31/2003* | |||
(Submit an extra copy of page one of this report) | ||||
Sincerely, | ||||
(USE APPROPRIATE OFFICIAL'S NAME) | ||||
Enclosures: (Include appropriate spreadsheets, copy of POA, ACM and 5402, and other items listed in IRM 8.9.1.5.4.2. This report is similar to a regular report or supplemental report and should follow the instructions in IRM 8.9.1.5.4.2 for attachments and IRM 8.9.1.5.5 for distribution). Send the complete package using Form 4081 as per IRM 8.9.1.5.5. |
Internal Revenue Service Appeals Office (Office Location or address) Date: |
Department of the Treasury Person to Contact: (Name) Employee ID Number: Tel: Fax: Refer Reply to: (Contact Office Symbols) Related Case(s): (if applicable) |
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The Chairman Joint Committee on Taxation c/o Internal Revenue Service Attention: Wendy Ryan AP:TS:TPP(Exam) 1111 Constitution Avenue, NW Washington, DC 20224 |
||||
Dear Mr. Chairman | ||||
As required by Section 6405 of the Internal Revenue Code, the following refunds or credits of income taxes are reported in favor of Taxpayer Company, Inc., EIN xx-xxxxxxx, of City, State: | ||||
Refunds or Credits | ||||
Year | Deficiency | Tentative Allowance Section 6405(b) |
Net Refunds or Credits |
|
1995 | $450,000 | $450,000 | ||
1996 | 325,000 | 325,000 | ||
1997 | $175,000 | 600,000 | 425,000 | |
TOTALS | $175,000 | $1,375,000 | $1,200,000 | |
In addition, there is a proposed refund in the amount of $23,759 for 1994. | ||||
The refunds results primarily from the carryback of a net operating loss (NOLD) and unused investment credit. The taxable income and tax liability reported on the returns and the taxable income as finally determined prior to allowance of NOLD are reflected on an attached spreadsheet. | ||||
Net operating loss deduction allowed: | ||||
Year | Amount | Carryback From | ||
1995 | $705,130 | 1998 | ||
1996 | $833,340 | 1998 | ||
1997 | $4,102,500 | 1998 | ||
Additional investment credits: | ||||
Year | Amount | Carryback From | ||
1995 | $175,000 | 1998 | ||
The taxpayer manufactures, sells, and rents farm machinery. | ||||
The principal causes for the 1998 loss were the competition of foreign products, a prolonged strike by the production employees in 1998, the subsidiary's erroneous projection of research and development costs, and the market's demand for a new product. | ||||
RAR dated June 30, 2000 (1994 – 1997) | ||||
RAR dated May 21, 2001 (1998) | ||||
Agreement was obtained by Form 870–AD waiver, a copy of which is enclosed. The overassessments are approved. | ||||
Sincerely, | ||||
(USE APPROPRIATE OFFICIAL'S NAME) | ||||
Enclosures |
Internal Revenue Service Appeals Office (Office Location or address) Date: |
Department of the Treasury Person to Contact: (Name) Employee ID Number: Tel: Fax: Refer Reply to: (Contact Office Symbols) Related Case(s): (if applicable) |
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---|---|---|---|
The Chairman Joint Committee on Taxation c/o Internal Revenue Service Attention: Wendy Ryan AP:TS:TPP(Exam) 1111 Constitution Avenue, NW Washington, D.C. 20224 |
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Supplemental Report | |||
Dear Mr. Chairman: | |||
As required by Section 6405 of the Internal Revenue Code of 1986, the following refunds or credits of income tax are reported in favor of Taxpayer Company, Inc., EIN xx-xxxxxxx, of City, State: | |||
Year | Section 6405(a) | Net Refund or Credit | |
1993 | $16,346 | $16,346 | |
1997 | 967,927 | 967,927 | |
1998 | 648,517 | 648,517 | |
Totals | $1,632,790 | $1,632,790 | |
In addition to the above, a deficiency of $215,696 and $476,009 was determined for 1995 and 1996, respectively. There is also a Section 6405(b) refund of $796,752. | |||
The refund for 1993 resulted primarily from the carryback of a net operating loss and unused investment credit. The principal cause of the overpayments in 1997 and 1998 was the elimination of intracompany profits. | |||
Net operating loss deduction allowed: | |||
Year | Amount | Carryback From | |
1996 | $602,041 | 1999 | |
Additional investment credits: | |||
Year | Amount | Carryback From | |
1993 | $16,346 | 1996 | |
The taxpayer manufactures, sells, and rents farm machinery. | |||
The principal causes for the 1999 loss were the competition of foreign products, a prolonged strike by the production employees in 1999, the subsidiary's erroneous projection of research and development costs, and the market's demand for a new product. | |||
The overpayments for 1997 and 1998 were caused by the elimination, during the course of an Internal Revenue Service audit, of profits of $2,865,343 in 1997, and $1,671,326 in 1998. These profits, reported on the tax returns as sales income, were determined by the examining officer to be intracompany profits involving items produced by the manufacturing divisions and transferred to the rental and leasing divisions at the wholesale price a dealer would pay rather than at the manufacturer's cost. | |||
RAR dated July 26, 1998 (1996) | |||
RAR dated July 22, 2000 (1997–1999) | |||
Agreement was obtained by Form 870–AD waiver, a copy of which is enclosed. The overassessments are approved. | |||
Sincerely, | |||
.(USE APPROPRIATE OFFICIAL'S NAME) | |||
Enclosures |
Internal Revenue Service Appeals Office (Office Location or address) Date: |
Department of the Treasury Person to Contact: (Name) Employee ID Number: Tel: Fax: Refer Reply to: (Contact Office Symbols) Related Case(s): (if applicable) Deficiency Case Report (#1 or #2) Period ended (03/31/xx or 09/30/xx) |
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Chief of Staff Joint Committee on Taxation c/o Internal Revenue Service Attention: Wendy Ryan AP:TS:TPP(Exam) 1111 Constitution Avenue, NW Washington, D. C. 20224 |
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Attention: Refund Counsel | |||
As requested under the authority contained in Section 8023(a) of the Internal Revenue Code of 1986, we report the following deficiencies in income tax due from Taxpayer Company, Inc., EIN xx-xxxxxxx, of City, State: | |||
Deficiency | |||
Year | Compliance | Appeals | |
1994 | $4,126,421 | $3,678,019 | |
1995 | 8,174,526 | 6,837,613 | |
Totals | $12,300,947 | $10,515,632 | |
The principal causes of the deficiencies were adjustments made for partnership income, deferred interest income, investment credit on progress expenditures, advance gas payments and intangible drilling costs. | |||
The taxpayer produces and sells natural gas and oil at wholesale. | |||
In a report dated February 10, 19XX, covering the years 19XX and 19XX, the examining officer proposed adjustments, a number of which were protested to Appeals. Enclosed are copies of the Appeals Transmittal Memorandum and Case Memo and the settlement computation for your review. | |||
The taxpayer executed a Waiver, Form 870–AD, reflecting the deficiencies shown on page 1 of this letter. The taxpayer also executed a Closing Agreement, Form 906, with respect to Issue 5 in the Supporting Statement. Copies of the Forms 870–AD and 906 are enclosed. | |||
Sincerely, (USE APPROPRIATE OFFICIAL'S NAME) |
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Enclosures |
Internal Revenue Service Appeals Office (Office Location or address) Date: applicable) |
Department of the Treasury Person to Contact: (Name) Employee ID Number: Tel: Fax: Refer Reply to: (Contact Office Symbols) Related Case(s): (if |
|
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The Chairman Joint Committee on Taxation c/o Internal Revenue Service Attention: Wendy Ryan AP:TS:TPP(Exam) 1111 Constitution Avenue, NW Washington, D. C. 20224 |
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Modified Expedite Refund | ||
Dear Mr. Chairman: | ||
As required by Section 6405 of the Internal Revenue Code of 1986, the following refunds or credits of income taxes are reported in favor of Taxpayer Company Inc., EIN xx-xxxxxxx, of City, State: | ||
Year | Section: 6405(a) | Net Refund or Credit |
1998 | $1,632,790 | $1,632,790 |
The principal cause of the overpayments was the elimination of intracompany profits. | ||
This report is submitted under the procedures contained in IRM 8.9.1.5.1.5. The taxpayer requested that refund be paid as soon as possible under this Manual procedure. It has been determined that no disadvantage will occur to the Government in paying the refund. A decision to examine the 1998 return will not be made for at least 18 months and we are not able to anticipate a completion date of our consideration of the 1998 year. Security has been posted for the amount of the proposed refund plus accrued interest. We have enclosed copies of a Letter of Credit and Collateral Agreement for your consideration. | ||
This is a request for an expedited refund (Submit an extra copy of page one of this report) . A supplemental JC report will follow. | ||
Sincerely, (USE APPROPRIATE OFFICIAL'S NAME) |
||
Enclosure: Copy of security agreement |
Internal Revenue Service Appeals Office (Office Location or address) Date: |
Department of the Treasury Person to Contact: (Name) Employee ID Number: Tel: Fax: Refer Reply to: (Contact Office Symbols) Related Case(s): (if applicable) |
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---|---|---|---|
The Chairman Joint Committee on Taxation c/o Internal Revenue Service Attention: Wendy Ryan AP:TS:TPP(Exam) 1111 Constitution Avenue, NW Washington, D. C. 20224 |
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Dear Mr. Chairman: | |||
As required by Section 6405 of the Internal Revenue Code of 1986, we are reporting a refund or credit of estate tax in favor of the estate of Taxpayer, SSN, of City, State. The following table sets out the estate tax refund offset by the amount of the barred fiduciary income tax plus interest: | |||
Date of Death | Section 6405(a) | Offset | Net Refund or Credit |
The refund for the estate was caused by shifting the deductions for administering the estate under IRC section 2052(a) from fiduciary income tax returns (Forms 1041) filed by the estate, to the estate tax return (Form 706). The taxpayer has agreed to an offset against the estate tax refund to the extent of barred income tax deficiencies plus interest in accordance with Revenue Ruling 81–287. | |||
The estate tax file was previously considered by Appeals and was closed on other issues on February 8, 1998. The taxable estate and tax liability as previously determined by Appeals and the taxable estate as finally determined are as follows: | |||
Date of Death | Taxable Estate | Tax Liability | Taxable Estate Finally Determined |
The estate's principal assets are undeveloped real estate in County, State. | |||
RAR dated RAR dated |
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The expedited refund procedure was not used in this case because the statute of limitations is open for this refund solely because a timely claim for refund has been filed. | |||
Agreement was obtained by Form 890–AD waiver with conditions, a copy of which is enclosed. The overassessment is approved. | |||
Sincerely, (USE APPROPRIATE OFFICIAL'S NAME) |
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Enclosures |
Internal Revenue Service Appeals Office |
Department of the Treasury |
Person to Contact: |
|
Name of Taxpayer Attn: Name of Corporate Officer |
Employee Identification Number: |
Street Address - Suite/Room # City, State, Zip Code |
Telephone Number: |
Fax Number: |
|
Date: | Refer Reply to: |
In Re: |
|
Tax Period(s) |
Dear Corporate Officer:
(Introduction):
We have prepared and forwarded the special report required by section 6405 of the Internal Revenue Code to the National Office Internal Revenue Service for submission to the Joint Committee on Taxation.
Payment [Choose appropriate paragraph]:
(Overpayments over $2,000,000) We cannot process your overassessment(s)/overpayment(s) as shown in the report until after the case is released by the Joint Committee on Taxation.
(Qualified Waiver) The " qualified" Form [Insert Form Number] you completed and signed will become effective on the date the Joint Committee releases its jurisdiction of the case.
(Expedite Refund) When the Joint Committee on Taxation receives this report, the 30-day period, during which we are statutorily prohibited from issuing the refunds, will commence. If the Joint Committee on Taxation does not raise any concerns regarding the Service's position, we will process the refunds as soon as possible after the expiration of this 30-day period.
(Straight Deficiency) The deficiency shown on the Form[Insert Form Number] you completed and signed will be assessed. If you have not paid the deficiency and interest, we will bill you.
Other:
(872-A)
This letter does not terminate Appeals consideration referred to in the consent Form 872-A, Special Consent to Extend the Time to Assess Tax, filed for the tax period(s) ended [MM/DD/YYYY].
Closing:
We will let you known when the Joint Committee on Taxation completes consideration of your case. If you have any questions, please contact the person whose name and telephone number are shown above.
Sincerely, | |
Enclosures cc: Authorized Representative |
Internal Revenue Service Appeals Office |
Department of the Treasury |
Person to Contact: |
|
Name of Taxpayer Attn: Name of Corporate Officer Street Address - Suite/Room # City, State, Zip Code |
Employee Identification Number: |
Telephone Number: |
|
Fax Number: |
|
Date: | Refer Reply to: |
In Re: |
|
Tax Period(s) |
Dear Corporate Officer:
We have been advised that the Joint Committee on Taxation has completed its consideration of our special report (made to satisfy the requirements of section 6405 of the Internal Revenue Code) for the tax period(s) ended [MM/DD/YYYY] and has taken no exception to the conclusions reached by the Internal Revenue Service.
Additional Paragraphs (Select as appropriate):
This is your notice of termination of Appeals consideration referred to in consent Form(s) 872-A, Special Consent to Extend the Time to Assess Tax, for the tax period(s) ended [MM/DD/YYYY].
We will mail you, at a later date, your notice of termination of Appeals consideration referred to in consent Form(s) 872-A for the tax period(s) ended [MM/DD/YYYY].
We have forwarded your case to the [Insert campus/APS location]for processing.
The following is used and replaces the above if the refund is made before the Joint Committee on Taxation has released its jurisdiction.
The Joint Committee on Taxation has taken no exception to our processing of the overpayment(s) as shown on the Form [insert the waiver form number] previously furnished to you or being accepted per your amended return claim(s) on Form [1040X/1120X] previously filed by you.
Accordingly, the overpayment will soon be processed for refund or credit.
This letter is not a notification that the Joint Committee on Taxation has completed its consideration of the conclusions reached by the Service regarding these income tax returns. At a later time, we will let you know when the Joint Committee on Taxation completes such consideration.
Sincerely, | |
cc: Authorized Representative |
Name: XYZ Corp. Inc. | |||
EIN: 99-9999999 | |||
INFORMATION FOR JOINT COMMITTEE LETTER | |||
Refunds or Credits | |||
Year | Proposed Refunds Section 6405(a) |
Tentative Allowances Section 6405(b) |
Net Refund or Credit |
2000 | $ 2,380,000 | $2,380,000 | |
2001 | $2,720,000 | 2,720,000 | |
Totals | $2,720,000 ======== |
$2,380,000 ========= |
$5,100,000 ========= |
In addition to the above, deficiencies of $170,000 and $34,000 were determined for tax years 2002 and 2003, respectively. | |||
Capital Loss Carryback Allowed: | |||
Year | Amount | Carryback From | |
2000 | $7,000,000 | 2003 | |
Joint Committee Spreadsheet | |||
Taxable Income and Tax Liability Report on Returns and Taxable Income as Finally Determined Prior to Allowance of NOLD & CLCB* | |||
Year | Taxable Income/(Loss) | Tax Liability | Taxable Income/(Loss) Finally Determined Prior to Allowance of NOLD & CLCB |
2000 | $8000,000 | $2,720,000 | $1,000,000 |
2001 | $9,000,000 | $3,060,000 | $1,000,000 |
2003 | $4,000,000 | $1,360,000 | $4,100,000 |
* CLCB = Capital Loss Carryback | |||
NOTE to Tax Computation Specialist : It is not necessary to include the 2002 year since it does not relate to the Joint Committee refund. |
ABC Inc. & Subsidiaries EIN: 99-0000000 |
||||
---|---|---|---|---|
Tax Year | 200012 | 200112 | 200212 | 200312 |
Taxable Income/(Loss) b/f NOLD - Per Return | 8,000,000 | 9,000,000 | 5,000,000 | 4,000,000 |
Current Adjustments | ______0 | -8,000,000 | 500,000 | 100,000 |
Taxable Income/(Loss) Before NOLD and CLCB | 8,000,000 | 1,000,000 | 5,500,000 | 4,100,000 |
Capital loss c/b from 200312 | -7,000,000 | _________ |
_________ |
_________ |
Corrected Taxable Income/(Loss) | 1,000,000 ======== |
1,000,000 ======== |
5,500,000 ======== |
4,100,000 ======== |
Corrected Tax b/f Credits | 340,000 | 340,000 | 1,870,000 | 1,394,000 |
Foreign Tax Credit | 0 |
0 |
0 |
0 |
General Business Credits | 0 |
0 |
0 |
0 |
Prior Year Minimum Tax Credit | ______0 | _______0 | ______0 | ______0 |
Balance of Tax Less Credits | 340,000 | 340,000 | 1,870,0000 | 1,394,000 |
Plus Recapture Taxes | 0 | 0 | 0 | 0 |
Less: Regular Tax Before Credits Less FTC | 340,000 | 340,000 | 1,870,000 | 1,394,000 |
Alternative Minimum Tax as Corrected | 0 | 0 | 0 | 0 |
Alternative Minimum Tax | 0 | 0 | 0 | 0 |
Plus: Environmental Tax Correct | ______0 | ______0 | _____N/A | _____N/A |
Total Corrected Tax Liability | 340,000 | 340,000 | 1,870,000 | 1,394,000 |
Total Tax Per Return | 2,720,000 | 3,060,000 | 1,700,000 | 1,360,000 |
Less: Tentative Refunds | 0 | 0 | 0 | 0 |
10/15/2004 - Carryback from 200312 | (2,380,000) | _________ | _________ | _________ |
Tax per Return or as Previously Adjusted | 340,000 | 3,060,000 | 1,700,000 | 1,360,000 |
Deficiency/Overassessment) | 0 ======== |
-2,720,000 ======== |
170,000 ======== |
34,000 ======= |
ABC Inc. & Subsidiaries EIN: 99-0000000 |
||||
---|---|---|---|---|
Tax Year | 200012 | 200112 | 200212 | 200312 |
Alt Taxable Income/(Loss) Per Return | 8,000,000 | 9,000,000 | 5,000,000 | 4,000,000 |
Current Adjustments & Capital loss c/b: | ||||
Adjustments & Preferences Items Adjustments & Preferences Items | -8,000,000 | 500,000 | 100,000 | |
Capital loss c/b from 200312 | -7,000,000 | _________ |
_________ |
_________ |
Alt Taxable Income/(Loss) Before ATNOLD | 1,000,000 | 1,000,000 | 5,500,000 | 4,100,000 |
ATNOL | _____0 | _____0 | _____0 | _____0 |
Corrected Alternative Taxable Income/(Loss) | 1,000,000 ======== |
1,000,000 ======== |
5,500,000 ======== |
4,100,000 ======== |
ATNOLD Limitation | 900,000 ======= |
900,000 ======= |
4,950,000 ======== |
3,690,000 ======== |
Tentative Minimum Tax Before Credits | 200,000 | 200,000 | 1,100,000 | 820,000 |
Less: AMT Foreign Tax Credit | 0 | 0 | 0 | 0 |
Tentative Minimum Tax | 200,000 | 200,000 | 1,100,000 | 820,000 |
Less: Regular Tax Before Credits Less FTC | 340,000 | 340,000 | 1,870,000 | 1,394,000 |
Alternative Minimum Tax as Corrected | 0 | 0 | 0 | 0 |
Alternative Minimum Tax per Return | 0 | 0 | 0 | 0 |
Alternative Minimum Tax per Return | 0 | 0 | 0 | 0 |
Plus: Increases/(Decreases) | ______0 | ______0 | ______0 | ______0 |
Net Alternative Min Tax Increase/(Decrease) | 0 ====== |
0 ====== |
0 ====== |
0 ====== |
Environmental Tax as Corrected | 0 | 0 | 0 | 0 |
Environmental Tax per Return | N/A | N/A | N/A | N/A |
Plus: Increases/(Decreases) | ______0 | ______0 | ______0 | ______0 |
Env Tax as Previously Adjusted | ______0 | ______0 | ______0 | ______0 |
Net Env Tax Increase/(Decrease) | 0 ======= |
0 ======= |
0 ======= |
0 ======= |