4.36.5  Reports

4.36.5.1  (05-04-2010)
Types of Reports

  1. The following are the various types of reports that are submitted to the Joint Committee on Taxation (JCT) on refund cases:

    1. Regular

    2. Expedite

    3. Minimum Refund

    4. Modified Expedite

    5. Supplemental

    6. Foreign Sales Corporation (FSC)

  2. According to IRC 8023(a), the Service reports on a number of deficiency cases to the JCT. See IRM 4.36.5.6 for details.

4.36.5.1.1  (05-04-2010)
Regular Report

  1. The Regular Report is outlined in Exhibit 4.36.5-1 and a sample is shown in Exhibit 4.36.5-2.

  2. 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 4.36.5.1.2), or

    3. Does not fall under other report types, such as Modified Expedite, Supplemental, FSC, or Minimum Refund.

4.36.5.1.2  (05-04-2010)
Expedite Refund Report

  1. 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. An extra copy of page one of the report should be included. The JCT will stamp the first page of the report and fax it back to the JC specialist group. The stamped date starts the thirty-day period that must elapse before an IRC 6405(a) refund can be issued.

  2. 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 6405(a) refund in excess of $2,000,000, and

    3. The conditions set forth in IRM 4.36.4.14 are met.

  3. 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

  1. 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 4.36.3.7.3.)

  2. It should be clearly marked "MODIFIED EXPEDITE REFUND " as shown in Exhibit 4.36.5-4.

  3. Processing is the same as for Expedite Refund Reports. Refer to IRM 4.36.5.7 for mailing instructions. Refer to IRM 4.36.4.13 for processing the refunds.

4.36.5.1.4  (05-04-2010)
Supplemental Report

  1. 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 JCT.

    3. See Exhibit 4.36.5–6 for a sample report.

  2. 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.

  3. A supplemental report is required even if the final examination results in a refund below the jurisdictional amount except in the case of tentative refunds from unexamined source years. In that situation a supplemental report would not be required if the refund falls below the jurisdictional amount. .See IRM 4.36.4.6. If the issues are unagreed, a supplemental report may be prepared by Appeals. In either event, the JCT will be notified of the final results of examination or Appeals.

4.36.5.1.5  (05-04-2010)
Foreign Sales Corporation (FSC) Report

  1. 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.

  2. See Exhibit 4.36.5-5 for 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  (05-04-2010)
Items Common to All Reports

  1. The following requirements apply to all Joint Committee reports:

    1. Form 4081

    2. Statement of years covered in report

    3. Distribution of copies

    4. Power of Attorney

    5. Spreadsheets

4.36.5.2.1  (05-04-2010)
Form 4081

  1. Form 4081, Transmittal Memorandum - Joint Committee Case , is used as a cover sheet for reports going to the JCT. This form is used instead of Form 3210, Document Transmittal.

  2. 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

4.36.5.2.2  (05-04-2010)
Years Covered in Report

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

4.36.5.2.3  (05-04-2010)
Distribution of Copies

  1. All reports will be prepared in duplicate and dated.

  2. The report is distributed as follows:

    1. Original for Joint Committee on Taxation.

    2. One copy for the case file.

    3. An extra copy of page one for Expedite/Modified Expedite Refund Reports to JCT.

4.36.5.2.4  (05-04-2010)
Power of Attorney

  1. A copy of the Power of Attorney (or equivalent) to should be included in the package sent to the JCT.

4.36.5.2.5  (05-04-2010)
Spreadsheets

  1. 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.

  2. 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.

4.36.5.3  (05-04-2010)
Report Assembly

  1. 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 on Taxation.

  2. If the file contains attachments in addition to the spreadsheets and Power of Attorney, then dividers should be used to identify each attachment.

  3. The attachments should be held together using a staple, fastener, or binder clip.

    Figure 4.36.5-1
    Assembly of All Joint Committee Reports (Please put in this order)
    Form 4081 (Form 3210 is not required)
    Extra copy of page one of the 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* (Form 4665 should not be mailed to the JCT)
    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 approval memo from Chief Counsel

4.36.5.4  (05-04-2010)
Discovery of Unreported Refunds

  1. Upon discovering that a refund in excess of $2 million 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 by the JC specialist and sent to the appropriate Territory Manager.

4.36.5.5  (02-15-2002)
Special Situations

  1. 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  (05-04-2010)
Tentative Refunds from Unexamined Source Years

  1. 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, and

    2. This paragraph will be added:
      "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 to the Joint Committee on Taxation, provided the refund amounts satisfy the reporting requirements of IRC 6405."

    3. A tabulation of the tentative allowance carryback amounts will follow the above paragraph.

4.36.5.5.2  (05-04-2010)
Cases with Unagreed Issues-Minimum Refund

  1. 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 6405(a) refund, then a Joint Committee report will be written. (See IRM 4.36.3.7.1)

  2. 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.

  3. 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. See Exhibit 4.36.5-8 for a sample minimum refund report.

4.36.5.5.3  (05-04-2010)
Request for Refunds - Claims For Unexamined Source or Refund Years - Modified Expedite Refund

  1. 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 4.36.3.7.3.

  2. 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  (05-04-2010)
Large Deficiency Case Reports

  1. Under the provisions of IRC 8023(a), the Service reports to the JCT 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 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.

  2. 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 8023(a).

    4. The power of attorney requirements of IRM 4.36.5.3 do not apply.

  3. Exhibit 4.36.5-7 contains an example of the format and language of these reports.

4.36.5.6.1  (05-04-2010)
Reporting Periods and Dates

  1. Joint Committee Review submits these deficiency case reports twice a year.

  2. 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.

4.36.5.6.2  (05-04-2010)
Exceptions

  1. The following types of deficiency cases will not be considered for submission as deficiency case reports:

    1. Cases sent to and considered by Appeals, or docketed in the Tax Court;

    2. Cases where it is known that the deficiency years have been or will be reported to the Joint Committee on Taxation as part of an overpayment case; and

    3. Special Enforcement Program (SEP) cases.

4.36.5.7  (05-04-2010)
Mailing Instructions

  1. All reports should be shipped express/overnight directly to the JCT.

    Joint Committee on Taxation
    (name of current JCT secretary)
    Main IRS Bldg, C:JC:3565/IR
    1111 Constitution Avenue
    Washington, DC 20001

Exhibit 4.36.5-1 
Outline 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 Supplemental Report
Exhibit 4.36.5-7 Large Deficiency Case Report
Exhibit 4.36.5-8 Expedite (Minimum Refund)
Exhibit 4.36.5-9 Joint Committee Report Format

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 Section 6405(a) refunds. Any other refunds prematurely allowed should also be in the Section 6405(a) column.
** If more than one year is reported, all columns must be totaled.

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:

  1. Proposed refunds and deficiencies for nonjurisdictional years should be noted here, as shown in the sample report.

  2. Unexamined source years. See IRM 4.36.3.7 for specific information.

  3. The primary reason(s) for the refunds.

  4. Reference to enclosed spreadsheets (IRM 4.36 3.6.5).

  5. Related taxpayers for which reports are being submitted concurrently.

  6. Prematurely allowed refunds or credits.

Taxpayer History Section

The first paragraph (where appropriate) should include:

  1. Date of incorporation.

  2. Principal business activities and products.

  3. Changes in activity or products if pertinent to understanding the adjustments or causes of the overassessments.

  4. Description of stock ownership (closely held or publicly traded).

  5. The names or number of subsidiaries or affiliates.

  6. Explanation of structure and any changes in capital structure, mergers, or corporate acquisitions/dispositions.

  7. 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:

  1. Claims filed by the taxpayer, including the amounts and basis for filing. If there are numerous claims, they can be listed in an attachment.

  2. Survey action by the examiner.

  3. 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.

  4. Explanation of a jurisdictional refund that was not previously reported.

  5. If the case involves a change in accounting method or period, a copy of the permission to change.

  6. A statement that the case is submitted under the unagreed case procedures IRM 4.36.3.6.1 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.

  7. Whether it is a Coordinated Industry case.

  8. Whether there is a Power of Attorney on file and enclosed.

  9. The statute of limitations dates (regular and special) for each refund year and source year.

Exhibit 4.36.5-2 
Sample Regular Joint Committee Report

The Chairman
Joint Committee on Taxation
Attn: (Name of Senior Refund Counsel)
C:JC:3565/IR
1111 Constitution Ave., NW
Washington, DC 20224
  LMSB:PQAS:195X:JC
Examination Area -
J.C. Specialist:
Phone #:
Fax #:
Related Cases: None
Date:
         
Dear Mr. Chairman:
In accordance with the provision of Section 6405 of the Internal Revenue Code, there are reported the following refunds or credits on income tax in favor of Taxpayer, Inc. and Subsidiaries , (EIN XX-XXXXXXX), City, State:
  Refunds or Credits  
  Deficiency Tentative Allowance
Section 6405 (b)
Net Refunds
or Credits
 
Year        
200012   $450,000 $450,000  
200112   325,000 325,000  
200212 $175,000 1,600,000 1,425,000  
Totals $175,000 $2,375,000 $2,200,000  
In addition, there is a proposed refund in the amount of $23,759 for 199912.
The refunds resulted primarily from the carryback of a net operating loss and unused credits from source year 200312. The taxable income and tax liabilities reported on the returns and as finally determined are shown on the enclosed spreadsheets.
TAXPAYER HISTORY
The taxpayer was incorporated on May 4, 1949, and is engaged in real estate development. The taxpayer is also active in the family entertainment business and has interests in soft drinks and heavy construction equipment. The company's stock is widely held and traded on the New York Stock Exchange. There were no major acquisitions during the years covered by this report.
The primary reason for the loss was due to competition from major rivals. Also, technological improvements caused rapid obsolescence of equipment.
PRIOR EXAMINATION HISTORY
Enclosed is the examination report, dated November 14, 2003, for the 200012 year. None of the other years in this report were previously examined.
CURRENT EXAMINATION ACTIVITY
On June 30, 2004 the taxpayer filed a timely application for tentative refund on form 1139 requesting income tax refunds of $450,000 for 200012, $325,000 for 200112, and $160,000 for 200212 based on an NOL and unused credits from 200312.
Enclosed is the examination report, dated May 21,2006, for the year 199912 through 200312. This is not a Coordinated Industry case.
There is no power of attorney on file for any of the years covered by this report.
The statutes of limitation are as follows:
  Year Original Statute or as Extended* Special Statute  
  199912 Expired 6/30/2007  
  200012 Expired 6/30/2007  
  200112 12/31/2007*    
  200212 12/31/2007*    
  200312 12/31/2007*    
The above overassessments are approved.
      Sincerely,  
         
         
      Team Manager  
Enclosures:        
Spreadsheets
RAR dated 11/14/2003 and Forms 886-A RAR dated 5/21/2006 and Forms 886-A
     

Exhibit 4.36.5-3 
Sample Expedite Joint Committee Report

The Chairman
Joint Committee on Taxation
Attn: (Name of Senior Refund Counsel)
C:JC:3565/IR
1111 Constitution Ave., NW Washington, DC 20224
  LMSB:PQAS:195X:JC
Examination Area -
J.C. Specialist:
Phone#
Fax #:
Related Cases: None
Date:
 
         
EXPEDITE REFUND
         
Dear Mr. Chairman:      
In accordance with the provision of Section 6405 of the Internal Revenue Code, there are reported the following refunds or credits on income tax in favor of Taxpayer, Inc. and Subsidiaries , (EIN XX-XXXXXXXX), City, State:
         
Refunds or Credits
Year Deficiency Proposed Refunds
Section 6405 (a)
Tentative Allowances
Section 6405 (b)
Net Refund Or Credit
199912   $790,000   $790,000
200012   500,000 2,450,000 2,950,000
200112 $1,275,000   54,325,000 53,050,000
200212   2,100,000 12,425,000 14,525,000
Total $1,275,000 $3,390,000 $69,200,000 $71,315,000
The refunds resulted primarily from the carryback of a net operating loss and unused credits from source year 200312. The taxable income and tax liabilities reported on the returns and as finally determined are shown on the enclosed spreadsheets and credit schedules.
TAXPAYER HISTORY
The taxpayer, incorporated on January 1, 1967, produces electronic components for computers, printers, and related devices. The company's stock is widely held and traded on the NASDAQ. There were no major acquisitions during the years covered by this report.
The primary reason for the loss was a 25% decline in total sales from 2002 to 2003, as both unit volume and average selling price decreased significantly. The demand for taxpayer's main product fell when its major competitor introduced a faster and more powerful product.
PRIOR EXAMINATION HISTORY
Examination results of the returns for 199912 through 200212 were shown in a RAR dated 4/15/2003 and cleared by the Joint Committee on 10/22/2003.
CURRENT EXAMINATION ACTIVITY
On 3/17/2004, the taxpayer filed a timely application for a tentative refund on Form 1139 requesting the following income tax refunds, based on an NOL carryback from 200312:
  Year Amount Claimed    
  200012 $27,450,000    
  200112 54,325,000    
  200212 12,425,000    
The taxpayer filed the following amended returns:
  Year Date Filed Income Tax
Increase or (Decrease)
 
  199912 6/30/2004 $(790,000)  
  200012 6/30/2004 (500,000)  
  200112 6/30/2004 1,275,000  
  200212 6/30/2004 (2,100,000)  
Exhibit A sets forth the taxpayer's reasons for filing the amended returns.
         
In a Form 1900 survey report of 1/28/2006, the agent recommends acceptance of the reported NOL for 200312, as well as its carryback into 200112 and 200212, resulting in the indicated tentative allowances. The report also recommends acceptance of the taxpayer's amended returns. Analysis of the returns show no unusual or controversial items that would warrant examination. The agent contacted the taxpayer to learn the economic reason for the reported NOL. This is a Coordinated Industry case.
There is no power of attorney on file for any of the years covered by this report.
The periods of limitation are as follows:
  Year Original Statute
or as Extended*
   
  199912 12/31/2007*    
  200012 12/31/2007*    
  200112 12/31/2007*    
  200212 12/31/2007*    
The above overassessments are approved
      Sincerely,  
         
      Team Manager  
         
Enclosures: Spreadsheets Credit schedules Exhibit A        
       
       
       

Exhibit 4.36.5-4 
Sample Modified Expedite Report

The Chairman
Joint Committee on Taxation
Attn: (Name of Senior Refund Counsel
C:JC:3565/IR
1111 Constitution Ave., NW
Washington, D C 20224
  LMSB:PQAS:195X:JC Examination Area -
J.C. Specialist:
Phone #
Fax #:
Related Cases: None
Date:
 
       
MODIFIED EXPEDITE REFUND  
       
Dear Mr. Chairman,      
In accordance with the provisions of Section 6405 of the Internal Revenue Code, there is reported the following refund or credit of income tax in favor of Taxpayer Name, (EIN XX-XXXXXXX), City, State:  
Year Refund or Credit
Proposed Refund
Section 6405(a)
   
200112 $28,973,648    
This report is submitted under the procedures contained in IRM 4.36.3.7.3. The taxpayer has requested that this refund be made since the examination for the 200012, 200112, 200212 and 200312 tax years will not be completed within six months. It has been determined that no disadvantage will occur to the Government in paying the refund. Security will be posted for the amount of the proposed refund and a copy of the Collateral Security Agreement is enclosed for your consideration. A supplemental report will be submitted after the completion of the examination if required by statute.  
The refund resulted, primarily, from the carryback of net operating losses. The taxable income and tax liabilities reported on the returns are shown on the enclosed spreadsheets.  
TAXPAYER HISTORY  
The taxpayer was incorporated on January 1, 1950, and is engaged in the business of operating a steel mill. The net operating losses were due primarily to high interest expense deductions, the write-off of capitalized debt costs subject to amortization, due to refinancing required by the merger, and charges related to the restructuring of the mill system-closings of duplicate location facilities, abandonments, severance costs and litigation settlements.
 
 
PRIOR EXAMINATION HISTORY  
None of the years was previously examined.  
The statute of limitations is as follows:      
Year Original Statute
or as Extended*
   
200112 09/30/2009*    
The above refund will be processed subject to the subsequent consideration of the 200012 through 200312 returns and review by your Committee of a supplemental report to be submitted upon completion of such action.  
  Sincerely,    
       
  Team Manager    
       
Enclosures:
Collateral Agreement
Spreadsheets
     

Exhibit 4.36.5-5 
Sample Foreign Sales Corporation (FSC) Report

The Chairman
Joint Committee on Taxation
Attn: (Name of Senior Refund Counsel)
C:JC:3565/IR
1111 Constitution Ave., NW
Washington, D C 20224
LMSB:PQAS:195X:JC
Examination Area -
J.C. Specialist:
Phone#
Fax #:
Related Cases: None
Date:
 
     
FSC REFUND
Dear Mr. Chairman,
In accordance with the provisions of Section 6405 of the Internal Revenue Code, there are reported the following refunds or credits of income tax in favor of Taxpayer FSC, Inc., (EIN XX-XXXXXXX), City, State:
  Year Refunds or Credits
Proposed Refunds
Section 6405(a)
 
  200112 $1,283,648  
  200212 2,552,407  
  Total $3,836,055  
       
This report is submitted under the procedures contained in IRM section 4.36.5.1.5. The refunds resulted from the adjustment of allocated and apportioned operating expenses. Corresponding adjustments have been made to the returns of the domestic parent, Taxpayer, Inc.
The above overassessments are approved.
  Sincerely,
       
       
  Team Manager

Exhibit 4.36.5-6 
Sample Supplemental Report

Supplemental reports may have different formats. This is one example.

The Chairman
Joint Committee on Taxation
Attn: (Name of Senior Refund Counsel )
C:JC:3565/IR
1111 Constitution Ave.,NW
Washington, DC 20224
LMSB:PQAS:195X:JC
Examination Area -
J.C. Specialist:
Phone #
Fax #
Related Cases: None
Date:
 
SUPPLEMENTAL REPORT  
Dear Mr. Chairman:    
In accordance with the provisions of Section 6405 of the Internal Revenue Code, there are reported the following refunds or credits on income tax in favor of Taxpayer, Inc and Subsidiaries, (EIN XX-XXXXXXX), City, State. This case was previously submitted to the Joint Committee on Taxation on February 10, 2006.  
  Refunds or Credits  
Year Ended Tentative Allowance
Section 6405(b)
 
200112 $1,427,139  
200212 1,635,021  
Total $3,062,160  
The refunds resulted primarily from the carryback of a net operating loss from tax year 200412. The taxable income and tax liabilities reported on the returns and as finally determined as shown on the enclosed spreadsheets.  
This report is being submitted as a supplemental report pursuant to the provisions of the Internal Revenue Manual 4.36.3.7.2 dealing with tentative allowances for unexamined source years.  
TAXPAYER HISTORY  
The taxpayer was incorporated in the state of Delaware on October 23, 1969 and has 47 subsidiaries. The taxpayer is wholly owned by a foreign company. The primary business of the taxpayer during the examination years was property and casualty insurance. Effective with the 200112 tax year the taxpayer's life insurance companies were included in the consolidated return. The company's other subsidiaries include insurance agencies, investment, annuity and risk management companies, and leasing companies.  
The taxpayer carried back an alternative minimum tax net operating loss from the 200312 year to 200112 and 200212.  
PRIOR EXAMINATION HISTORY  
Examination results of the returns for the 200112 and 200212 were shown in the revenue agents report dated December 15, 2005, which cleared the Joint Committee on Taxation on April 18, 2006.  
CURRENT EXAMINATION HISTORY  
The enclosed RAR, dated 4/2/2007, covers a concurrent examination of the returns for 200112, 200212, and 200412, Explanations of the recommended agreed adjustments are included in the enclosed Forms 5701.  
This taxpayer is part of the Coordinated Industry Program.  
There is no power of attorney on file for any of the years covered by this report.  
The statutes of limitation are as follows:  
Year Original Statute
or as Extended*
 
200112 12/31/2008*  
200212 12/31/2008*  
200412 12/31/2008*  
     
The above overassessments are approved.    
  Sincerely yours,  
     
  Team Manager  
     
Enclosures:    
Form 4549A dated 4/2/2007
Forms
Spreadsheets
   

Exhibit 4.36.5-7 
Sample Expedite Refund Report (Minimum Refund)

The Chairman
Joint Committee on Taxation
Attn: (Name of the Senior Refund Counsel)
C:JC:3565/IIR
1111 Constitution Ave., NW
Washington, DC 20224
LMSB:PQAS:195X:JC
Examination Area -
J.C. Specialist:
Phone #:
Fax #:
Related Cases: None
Date:
 
MINIMUM REFUND EXPEDITE REPORT  
Dear Mr. Chairman,    
In accordance with the provisions of Section 6405 of the Internal Revenue Code, there is reported the following refund or credit of income tax in favor of Taxpayer Name, (EIN XX-XXXXXXX), City, State:  
Year Refund or Credit
Proposed Minimum Refund
Section 6405(a)
 
200112 $28,973,648  
This report is submitted under the procedures contained in IRM 4.36.3.7.1. The unagreed issues will require a substantial period of time to resolve and the delay would deprive the taxpayer of a timely refund. The refunds reported reflect the minimum amount to which the taxpayer is entitle, regardless of the outcome of the unagreed issues. A supplemental report will be submitted after the completion of the examination and /or resolution of the unagreed issues.  
The refunds resulted, primarily, from the carryback of net operating losses. The taxable income and tax liabilities reported on the returns and as finally determined as shown on the enclosed spreadsheets.  
TAXPAYER HISTORY  
The taxpayer was incorporated on January 1, 1950, and is engaged in the business of operating a steel mill.  
The net operating losses were due primarily to high interest expense deductions, the write-off of capitalized debt costs subject to amortization, due to refinancing required by the merger, and charges related to the restructuring of the mill system-closings of duplicate location facilities, abandonments, severance costs and litigation settlements.  
PRIOR EXAMINATION HISTORY  
None of the years was previously examined.  
CURRENT EXAMINATION ACTIVITY  
In a partial agreement report dated April 16, 2005, it was determined that the taxpayer was entitled to a minimum of $28,973,648 for the 200112 year. An amount was determined to be currently deductible rather than capitalized as shown on the return as filed.  
The statute of limitations is as follows:  
Year Original Statute
or as Extended
 
200112 09/30/2008  
The above refund is approved subject to the subsequent consideration by Appeals of the unagreed issues for the tax year 200112.  
  Sincerely,  
       
       
    Team Manager  
       
Enclosures:      
Copy of RAR dated April 16, 2005
Spreadsheets
     

Exhibit 4.36.5-8 
Sample Large Deficiency Case Report

Chief of Staff
Joint Committee on Taxation
Attn: (Name of Senior Refund Counsel)
C:JC:3565/IIR
1111 Constitution Ave., NW
Washington, DC 20224
LMSB:PQAS:195X:JC
Examination Area -
J.C. Specialist:
Phone #
Fax #
Related Cases: None
Date:
LARGE DEFICIENCY CASE
Attn: Refund Counsel:
As requested under the authority contained in section 8023(a) of the Internal Revenue Code, the following deficiencies in income tax are reported for John Doe Trust, (EIN XX-XXXXXXX), City, State, for the six-month period ended March 31, 2006:
Year Deficiencies
199912 $950,000
200012 1,575,000
200112 2,590,000
200212 14,000,000
Total $19,115,000
The trust is set up for three beneficiaries, Mary Doe, Frank Doe and Ann Doe.
CURRENT EXAMINATION ACTIVITY
The enclosed RAR, dated 12/19/2005, covers a concurrent examination of the returns for 199912 through 200212. Explanations of the recommended agreed adjustments are included in the enclosed Forms 5701. This was not a Coordinated Industry case.
The periods of limitation for the subject years have expired.
This large deficiency report is submitted for your review.
    Sincerely,
     
     
    Team Manager
Enclosures:
Current RAR dated 12/19/2005
 

Exhibit 4.36.5-9 
Joint Committee Report Format

           
The Chairman   LMSB:PQAS:195X:JC
Joint Committee on Taxation   J.C. Specialist:
Attention: (Name of Senior Refund Counsel)   Phone No.:
C;JC:3565/IR     Fax No.:
1111 Constitution Avenue, NW   Related Case: None
Washington, DC 20224     Date:
 
[TYPE OF REPORT, I.E. EXPEDITE, MINIMUM REFUND, ETC]
Dear Mr. Chairman:
In accordance with the provisions of Section 6405 of the Internal Revenue Code, there are reported the following refunds or credits on income tax in favor of [identification of taxpayer] Taxpayer, Inc. and Subsidiaries (EIN XX-XXXXXX), City, State.
[Tabulation of Examination Results]
  Refunds or Credits
Year Deficiencies* Proposed Refunds Section 6405(a)* Tentative Allowances
Section 6405 (b)
Net Refunds
or Credits
199512     $2,450,000*** $2,450.000
199612   $2,000,500** 1,325,000 3,325,500
199712 $175,000   1,600,000 1,425,000
Total $175,000 $2,000,500 $5,375,000 $7,200,500
 
*Only use the Deficiency column if appropriate. If a refund was prematurely allowed, it should be included in the 6405(a) column. If there are only proposed non-jurisdictional refunds, do not include this column in the tabulations. Instead, add as narrative here.
[Proposed refunds and deficiencies for nonjurisdictional years]
In addition, there is a proposed refund in the amount of $53,450 for 199412.
[Primary reason for the refund]        
The refunds resulted primarily from the carryback of a net operating loss and unused credits from the year 199812.
[Reference to enclosed spreadsheets]        
The taxable income and tax liabilities reported on the returns and as finally determined are shown on the enclosed spreadsheets.
[Also, note the following here if applicable:
(1) tentative refunds from unexamined source years,
(2) related taxpayers for which reports are being submitted concurrently,
(3) prematurely allowed refunds or credits,
(4) claims from unexamined source years (modified expedite refund report)
(5) or a statement that the case is being submitted under the unagreed case procedures per IRM 4.36.3.71 and that a supplemental report will be submitted. See sample language for each situation below]
[Tentative Refunds from unexamined source years]    

(1) Further, under IRM 4.36.3.7.2, this is to advise you that there is the following tentative allowance carryback arising from the unexamined source year 199912, 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, the refund will be the subject of a supplemental reporting, provided the refund amount satisfies the reporting requirements of IRC Section 6405.
  Carryback Year Tentative Allowance Source Year    
  199712 3,555,123 199912    
[Related Taxpayers]        

(2) In addition, refunds resulted from the carryback of an operations loss and a capital loss from (name of related taxpayer) 199812 tax return.
[Prematurely allowed refunds]      

(3)**The proposed refund of $2,000,500 for 199612, included above, was not previously reported as required,
[Previously Unreported Refunds]      

***The tentative refund of $2,450,000 for 1995, included above was previously examined but not reported as required.
[Claims from unexamined source years (modified expedite refund report)]
(4) This report is submitted under the procedures contained in IRM 4.36.3.7.3. The taxpayer has requested that this refund be made since the examination for the 199612, 199712 and 199812 tax years will not be completed within six months. It has been determined that no disadvantage will occur to the Government in paying the refunds. Security will be posted for the amount of the proposed refund and a copy of the Collateral Security Agreement is enclosed for your consideration. A supplemental report will be submitted after the completion of the examination if required by statute.
[Unagreed issues/Minimum Refund]

(5) This report is submitted under the procedures contained in IRM 4.36.3.7.1. The unagreed issues will require a substantial period of time to resolve and the delay would deprive the taxpayer of a timely refund. The refunds reported reflect the minimum amount to which the taxpayer is entitled, regardless of the outcome of the unagreed issues. A supplemental report will be submitted after the completion of the examination and/or resolution of the unagreed issues.
TAXPAYER HISTORY
[First paragraph]        
The taxpayer was incorporated on [date of incorporation] May 4, 1949, [principal business activities and products] and is engaged in real estate development. [Changes in activity or products if pertinent to understanding the adjustments or causes of the overassessments.] The taxpayer is also active in the family entertainment business and has interests in soft drinks and heavy construction equipment. [Description of stock ownership] The company’s stock is widely held and traded on the New York Stock Exchange. [Explanation of structure and any changes in capital structure, mergers, or corporate acquisitions/dispositions] There were no major acquisitions during the years covered by this report. [Also include here: names or numbers of subsidiaries or affiliates, causes of short taxable years.]
[Second paragraph]        
[Brief statement of the economic reason for any net operating loss or capital loss] The primary reason for the loss was due to competition from major rivals. Also, technological improvements caused rapid obsolescence of equipment.
PRIOR EXAMINATION HISTORY
[Mention prior examinations and Appeals settlements; enclose copies of prior RARs and Appeals Memorandums] Enclosed is the examination report, dated November 14, 1998, for the 199512 year. [Statement of no prior examination]
None of the other years in this report were previously examined. [State clearance date of previous Joint Committee report, if applicable]
CURRENT EXAMINATION ACTIVITY
[List of claims and applications for tentative allowance filed by the taxpayer, including amounts and basis for filing. If numerous claims filed, list on a separate attachment.]
On June 30, 1999 the taxpayer filed a timely application for tentative refund on Form 1139 requesting income tax refunds of $1, 325,000 for 199612 and $1,600,000 for 199712 based on an NOL and unused credits from 199812.
[Or use the following or similar type format]
On June 30, 1999 the taxpayer filed a timely application for tentative refund on Form 1139 requesting the income tax refunds listed as follows, based on an NOL and unused credits from 199812.
  Year Refund Requested    
  199612 $1,325,000    
  199712 $1,600,000    
[Explanation of Premature Refund]
**On May 3, 1998, the taxpayer filed a Form 1120X to claim additional operating expenses for the year 199612. The refund in the amount of $2,000,500 was prematurely issued by the Service Center prior to submission of a report to the Joint Committee on Taxation and is now being reported.
[Statement of survey action if all or some of the years were surveyed]
In a Form 1900 survey report dated 1/1/05, the agent recommends acceptance of the reported NOL for 199812 and unused credits, as well as its carryback into 199612 and 199712, resulting in the indicated tentative allowances. Analysis of the returns shows no unusual or controversial items that would warrant examination. The agent contacted the taxpayer to learn the economic reason for the reported NOL.
Enclosed is the examination report, May 21, 2001, for the years 199412 through 199812.
[If applicable, (1) explanation of a jurisdictional refund that was not previously reported; change of accounting method comments;]
*** On April 30, 1997 the taxpayer filed a timely application for a tentative refund requesting an income tax refund of $2,450,000 for 199512 based on an NOL from 1996. This year was previously examined. In accordance with IRM 4.36.5.4.6, this jurisdictional amount was not previously reported to the Committee and is being reported currently.
[Statement whether it is a Coordinated Industry case]
This is (not) a Coordinated Industry case.
[Statement whether there is a Power of Attorney and if it is enclosed]
There is no power of attorney on file for any of the years covered by this report. ---or--- There is a power of attorney for the years covered by this report, and a copy is enclosed.
[Statute of Limitations dates (regular and special) for each year]
STATUTES OF LIMITATIONS
  Year Original Statute as Extended* Special Statute    
  199512 Expired 6/30/2003    
  199612 Expired 6/30/2003    
  199712 12/31/2002* 6/30/2003    
  199812 12/31/2002* 6/30/2003    
[If applicable, include all source years]
The above overassessments are approved.
      Sincerely,    
           
           
      Team Manager  
           
Enclosures (3)          
Spreadsheets
RAR dated 11/14/1998 and Forms 886-A
RAR dated 5/31/2001 and Forms 886-A
       

Exhibit 4.36.5-10 
Assembly of Joint Committee Report and Attachments

Transmittals:
Form 4081
Copy of Form 4081
For Expedite Reports:
Extra Copy of Page One of Report
For National Office Use:
Copy of Joint Committee Report
Regular Tax Spreadsheet
AMT Spreadsheet
Power of Attorney
For Refund Counsel:
Joint Committee Report
Regular Tax Spreadsheet
AMT Spreadsheet
Power of Attorney
Prior RAR
Current RAR
Other Attachments

More Internal Revenue Manual