A supplemental report may be required when a tentative refund under final determination has been made on tentative carryback refunds under IRC 6405(b) from unexamined source years and which were discussed in a previous report.

A supplemental report may also be required when a Modified Expedite Refund Report was previously submitted and a final determination has been made with regard to the claim or when a minimum refund (see IRM 4.36.3.7.1, Cases with Unagreed Issues - Minimum Refund) was previously reported and Appeals has resolved the unagreed issues. See IRM 8.7.9.7.1.5.

All attachments required with a regular report will be included with a supplemental report. See IRM 8.7.9.7.4.4.

For an example of a supplemental JC report see the exhibits at the end of this IRM section. See Exhibit 8.7.9-4.

Specific modifications to the regular JC report format are applicable for large deficiency case JC reports as listed below. See IRM 8.7.9.7.1.2.

For an example of a large deficiency case JC report see the exhibits at the end of this IRM section. See Exhibit 8.7.9-5.

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:

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.

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.

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.

See Exhibit 8.7.9-6. This exhibit contains an example of Modified Expedite Refund Request.

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.

See Exhibit 8.7.9-7. This is an example of an estate tax case JC report.

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.

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.

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.

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).

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.

All table columns should be TOTALED. Round off amounts to the nearest dollar in the report.

Include a brief statement on the nature of the taxpayer's business and the economic reasons for the overpayment.

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.

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.

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:

Add a statement to the JC report regarding which agreement form(s)/ waiver(s) were secured from the taxpayer.

For refund reports, place the documents in the following order from front to back:

Do not send the JC Case Netting Spreadsheet in place of or in addition to the other spreadsheets. It is used to help determine the jurisdictional amounts and for internal use only.

For large deficiency case reports, place the documents in the following order from front to back:

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.

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 must be dated when signed as directed by Delegation Order 4-18 (formerly DO 154, Rev. 10). The date should appear on the first page.

The following should be attached to the report:

Attachments should be held together by staple, fastener, or binder clip. Attachments should not be placed into a binder or file folder

See IRM 8.7.9.7.4.for report assembly instructions.

Address to be used on JC report and Form 4081:

If the original Form 5482 (when applicable) is mailed rather than emailed, the mailing address is:

Address to be used on shipping label :

When the AO or ATCL receives a phone call or email from a JCT staff attorney with an informal inquiry regarding a JC report they submitted, they must provide the following information to their ATM:

The AO or ATCL will notify their ATM when and how the inquiry was finally resolved.

Only the original contact is documented. Follow-up contacts/questions to the initial inquiry do not need to be recorded.

The ATM will capture this information on the JC Informal Inquiries Tracking Log ( See Exhibit 8.7.9-16.) and email the log to the appropriate Area Director (AD) at the end of each month. Each AD will consolidate the monthly logs and submit to their respective Director, Field Operations (DFO) and the AJCPA on a quarterly basis no later than the 5th day of the month following the end of the quarter.

The AJCPA will prepare a summary of the informal inquiries and send it to Appeals Executives by the 15th day of the month following the end of the quarter.

The JCT issues a SRM to the AJCPA by email in electronic format. Upon receipt, the AJCPA will log the SRM into the SRM Tracking Log ( See Exhibit 8.7.9-13.) and email the document along with the JC SRM Notification of Receipt ( See Exhibit 8.7.9-17. ) cover sheet to the Staff Assistant to the Chief, Appeals. The AJCPA will also email a copy to the AO or ATCL who submitted the report as well as the ATM.

Upon receipt, the Staff Assistant will immediately create an i-trak ticket and email the SRM to the appropriate DFO for control and assignment

The DFO secretary will log receipt of the SRM into the Administrative Control Log (JC Letters). See Exhibit 8.7.9-14.

The DFO will assign the SRM to the appropriate Area Director (AD) who will then assign it to the applicable, ATCL or AO through their ATM for preparation of the draft response.

The AO or ATCL assigned the JC case will:

If contact with the taxpayer is necessary to respond to the JCT inquiry, the taxpayer should be informed of the reason when contacted by Appeals. However, under no circumstances should the TP be told that the JCT has raised questions. Any inquiry should be presented as that of the Service reconsidering its position.

If a statutory notice of deficiency or a statutory notice of claim disallowance is issued as a result of a SRM, include a copy of the notice with the draft response to the AD. Similarly, if the taxpayer signs a waiver of statutory notice of claim disallowance, follow the same procedures.

If coordinated issues or issues involving Technical Guidance Coordinator (TGC) assignment are present, the AD coordinates with the Director, Technical Guidance (TG).

A Staff Summary Sheet will be used to document review and approval at each level. See Exhibit 8.7.9-15.

The AD will finalize the draft response making changes as necessary. This will include input from the Director, TG when coordinated issues or issues involving TGC assignment are present.

The AD will email the final draft response to the appropriate DFO along with any necessary comments and background material for their final consideration. The AD will also forward it to the Director, Technical Services (TS) when coordinated issues or issues involving TGC assignment are present. If warranted, the parties may plan a conference call to discuss.

The DFO will email the final draft response including a copy of the original SRM, any necessary technical papers or write-ups, and the Staff Summary Sheet to the Executive Assistant (EA) and a copy to the Staff Assistant for final review and signature by the Chief, Appeals. The email must clearly indicate:

Once the Chief, Appeals approves and signs the final memo, the Staff Assistant will forward the response to the Chief of Staff, JCT. The Staff Assistant will also scan the signed memo and email a copy to the appropriate DFO and the AJCPA. The Staff Assistant will close i-trak.

The AJCPA will email a copy of the signed memo to the JCT Senior Refund Counsel.

If, as a result of the concerns/issues raised by the JCT in the SRM, a revised JC report must be submitted, the AO or ATCL should contact the AJCPA. The AJCPA will coordinate submission of the revised report to the JCT along with the copy of the signed memo.

The AJCPA will maintain a log which captures the receipt, final distribution and issue settlement. On a quarterly basis, the AJCPA will prepare a summary report on SRM activity and send it to Appeals Executives by the 15th day of the month following the end of the quarter.

The JCT may issue a SRM that expresses concern regarding a reported Appeals settlement but which approves the release of the refund requested in the JC report. Generally, no response to the JCT is required.

The AJCPA will forward the SRM to the AO or ATCL in the same manner as a clearance letter. Once the SRM release letter has been received, the case may be processed or closed.

The AJCPA will include these types of SRMs in the tracking log of the other SRMs.