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.

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 .

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.

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.

This subsection covers the assembly of JC Reports.

See Exhibit 8.7.9-1. This is a checklist to aid in the assembly of the report package.

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.

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.

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.

Keep a copy of the JC report and the Form 4081 in the office file.

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.

Retain the case file in APS pending completion of JC review.

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.)

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.

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.

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.

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:

This subsection covers Mailing Addresses for JC Reports.

Computations will be prepared by the TCS to determine jurisdictional limits under IRC 6405(a), IRC 6405(b), and IRC 6405(c) as follows:

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.

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.

TCS will prepare a spreadsheet for regular tax.

The TCS will also prepare a spreadsheet for AMT/Environmental tax whether or not AMT applies.

An Excel spreadsheet for regular tax is included on the Appeals TCS web site at http://appeals.web.irs.gov/taxcomput/Default.htm.

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.

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.

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:

For any refund or credit where expedited refund procedures are applicable, include the following paragraph in the settlement computation:

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.

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.

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).

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.

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.

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.

The following action should be taken when reviewing the FAX copy of the clearance letter included in the administrative file received for closing:

Prepare Form 5403 to close to AIMS:

Assign to an APS employee on PEAs.

ACDS will be closed following general closing instructions and will include final processing of adjustments and update of appropriate systems

On each Form 5402 and copy, make an appropriate notation that "Joint Committee’s clearance letter dated -----," and distribute Form 5402.

Date and mail the notification letter ( Letter 1537(CG)) informing the taxpayer of completion of JC consideration.

Prepare the closed office file as outlined in IRM 8.20.7, Appeals Office File Management.

Process the case for closing after receipt of the FAX copy of the JC clearance letter. See IRM 8.7.9.10.1.

In addition, forward the file to Counsel for processing of the stipulation. Update ACDS:

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.

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.

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.

Indicate that the responsibility for the period of limitation is transferred to Compliance.

Request acknowledgement by the return of a date-stamped copy of Form 5402.

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.

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.

Close the case on ACDS following general closing instructions.

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.

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: