Purpose: This IRM section describes the duties of the Joint Committee Review team and the procedures they follow.

Audience: Examination personnel in LB&I, SB/SE and TE/GE divisions who work on Joint Committee cases.

Policy Owner: LB&I Policy under the Strategy, Policy and Governance office in the Assistant Deputy Commissioner Compliance Integration organization.

Program Owner: Joint Committee Review team within the Northeastern Compliance Practice Area

Primary Stakeholders: Stakeholders include examiners, taxpayers and the Joint Committee on Taxation.

If the JC review cannot be completed due to technical, computational, or procedural errors, a Notice of Suspended Referral (NSR) form or a Case Return Transmittal (CRT) form will be sent to the examiner and team manager to outline errors for correction so the review of the JC case can be completed and processed.

The case return criteria stated below identify five classified errors deemed significant enough to warrant return of the case to the examination team for correction.

Cases returned to the examination team by the Joint Committee Review team under these criteria must contain a clear and substantial error or involve an unexamined large, unusual, or questionable item. Where appropriate, the Joint Committee Review team should contact the examination team prior to returning the JC case for resolution of the identified problem with the JC case.

Every effort should be made by the examination team to resolve JC inquiries informally received by the Joint Committee Review team before the issuance of a CRT or NSR is warranted. Should the examination team require more than 15 days to resolve the JC inquiry, a written memorandum should be prepared outlining the specific information requested and returned to the examination team via completion of the appropriate box or boxes on the CRT or NSR.

If the Further Consideration box is checked on either the CRT or NSR form, the case is a priority assignment and is to be worked and resolved within 30 days by the examination team.

If the JC case is returned to the examination team via a NSR, the examination team must update ERCS to remove the Aging Reason Code (ARC) 27.

If the issues identified in the CRT or NSR for the reason of returning the JC electronic case (NSR) or JC physical case (CRT) back to the examination team are not resolved, the examination team must provide a status report every 30 days to the Joint Committee Review team until resolved. Upon resolution, the examination team must provide a written response to the issues and concerns noted by the Joint Committee Review team when the JC case was returned to the examination team.

If the examination team does not agree with the position taken by the Joint Committee Review team or the Joint Committee on Taxation (JCT) (with respect to a JC report submitted to the JCT), the administrative file will be returned via a CRT. Generally, the examination team should resolve outstanding issues in consultation with the Area Counsel. Disagreements not resolved at this level will be elevated to the appropriate management official. .

The following subsections describe conditions that will result in the return of a case. Also see IRM 4.8.2.8.1.

Upon completion of the review of the JC case, the Joint Committee Specialist will:

Inquiries from the JCT are considered Congressional inquiries and are high priority. The inquiries are generally questions involving a JC case that require clarification, additional information, and/or conference call after the Joint Committee Review team submits the JC report package to the JCT for oversight authority and release of the JC refunds.

Generally, any IRS records generated during an examination or other processing giving rise to the credit or refund should be considered agency records subject to the Freedom of Information Act (FOIA).

Informal or formal correspondence, including email, from the JCT are not considered agency records subject to FOIA and should not be released to the taxpayer without the written permission of the JCT. If the JCT communication contains a legend that says the document should be treated as a Congressional record and is beyond the scope of FOIA, it should be treated as such. However, the absence of the legend is not legally determinative. If a JCT document does not contain a legend, IRS practice is generally to treat the JCT document and any response thereto as a Congressional record. See IRM 11.3.13.3.5, Joint Committee on Taxation, for further guidance.

When the JCT expresses a differing position with respect to an issue, the Service may:

Any documents created by the Service in connection with a response to any JCT correspondence should also not be released to the taxpayer without written permission of the JCT.

JCT correspondence and related records should not be released in response to non-FOIA requests (i.e., requests under IRC 6103(e) or the Privacy Act) without the written permission of the JCT. Such requests should be coordinated with Chief Counsel (Procedure & Administration) prior to any response.

See IRM 4.36.4.12 for additional requirements.

If adjustments reducing the net refund or credit below the jurisdictional amount are made or proposed by the examination team, after a report has been submitted to the JCT but before JCT has issued a clearance letter on the case, the Joint Committee Review team will contact the JCT advising them of withdrawal of the case from their consideration.

Contact with the JCT should be made at the earliest opportunity once an agreement (Form 870 or equivalent), is secured. The JCT will be provided the taxpayer’s information, briefly discuss the adjustments, set forth the taxable income or loss and tax liability as finally determined, and request that the case be released from JCT jurisdiction.

Closing agreements, including those based on Competent Authority determinations (IRM 4.36.3.6.2.1), may not be signed by the approving Service official prior to their clearance by the JCT. Notwithstanding, they must be duly executed by taxpayers or their authorized representatives. A copy of the closing agreement will be submitted with the Joint Committee report. Following release by the JCT, closing agreements will be returned to the preparer for proper signatures.

In those situations where there is a request for a review of the closing agreement early in the examination (pre-submission review), such as Fast Track Settlement or Early Referral to Appeals, the Joint Committee Specialist will forward a copy of the draft closing agreement (signed by the taxpayer but not by the Service), issue write-ups, a letter from the taxpayer authorizing disclosure to the JCT, and a cover memo prepared by the examination team to the JCT. The Joint Committee Specialist’s contact information will also be provided. See IRM 4.36.3.6.2 and Exhibit 4.36.3-3. After it is reviewed, the JCT will notify the Joint Committee Specialist, who will notify the examination team that the closing agreement can now be signed by the appropriate Service official.

When a case settled under the Fast Track Settlement Program is submitted for review with an unsigned closing agreement, the Appeals Closing Memorandum (ACM) must be included as part of the file.

In the event a Joint Committee case must be placed in suspense, the JC case will be returned to the examination team for appropriate action and closure to CCP upon receipt of clearance by the JCT.

Bankruptcy or receivership cases that meet the jurisdictional amounts of IRC 6405 must be reported to the Joint Committee on Taxation. Overpayments or deficiencies should be processed in accordance with the procedures outlined in IRM 4.27, Bankruptcy Handbook.

JCT will accept reports on cases that have Partnership Control System (PCS) links. If the final determination on the investor's non-TEFRA issues results in a refund to the investor in excess of $2 million ($5 million for C corporations), the JC Specialist will prepare a JC report to the JCT for the non-TEFRA issues even though the review of the TEFRA key case has not been completed. A supplemental report will only be required if a flow-thru adjustment is resolved, the unified TEFRA partnership proceedings are completed and the refund to the investor is greater than $2 million ($5 million for C corporations). The JC Specialist does not need to prepare a supplemental report for the TEFRA proceedings unless the adjustment to the investor from the key case results in an additional refund to the investor in excess of $2 million ($5 million for C corporations).

When a JC report is sent to the JCT and there are open PCS links, include language similar to:
The taxpayer(s) are involved in unified partnership proceedings. If the resolution of the partnership/ proceedings results in an additional refund to the taxpayer(s) in excess of $2 million ($5 million for C corporations), an additional/supplemental report will be submitted. This report is being submitted prior to completion of the unified proceedings.

When the clearance letter is received, the case can be processed by the examination team. In instances where the Joint Committee Review team has the JC case file, the Joint Committee Review team will send the case back to the examination team for the examination team to process. The Joint Committee Review team will inform the examination team of the requirement to resubmit the case for a supplemental report once a PCS link is resolved.

The examination team is responsible for:

TEFRA references for examiners include:

If the taxpayer is entitled to a minimum refund in excess of $2 million ($5 million for C corporations), a JC report will be prepared prior to completion of the flow-thru examination. The minimum refund procedures for cases with unagreed issues are applicable. See IRM 4.36.3.7.1, Cases with Unagreed Issues - Minimum Refund..

Tax information about individuals or aliens admitted to permanent U.S. residence provided to the JCT pursuant to IRC 6405 requires Privacy Act accounting on Form 5482, Record of Disclosure.

The Joint Committee Specialist will complete Form 5482, Record of Disclosure if the individual is a U.S. citizen or alien admitted to permanent U.S. residence. The form is a two-part form. The original will be filed with the examination administrative file for the individual and the copy will be retained by the Joint Committee Specialist team for five years. Additional Forms 5482 need to be completed if information concerning years and/or individuals not previously accounted for is disclosed to the JCT. See IRM 10.5.6.7, Privacy Act Accounting for Disclosures, for additional information about the form.

Form 5482 should be completed at the time the Joint Committee report is forwarded to the JCT.

When completing the form, Item 3, Record System Number, should be 42.001 and Item 8, Privacy Act Provisions, should be (b)(9).