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71 Tax Executive 82 (2019)
Getting Your Refund - Once Your Tax Disputes Are Resolved

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If you are like most taxpayers, you want to close out your old tax years as soon as possible especially when
you are owed a refund. In many cases- refund or not-there are a surprising number of Internal Revenue
Service procedures and documentation requirements to navigate after resolving or settling the issues in
Exam,  Appeals, or litigation. These hurdles can include closing agreements, stipulations, decision docu-
ments, and Form 870 or 870-AD. Taxpayers must take into account how best to close the years; potentially
protect additional claims, if any; establish a precedent for future years (or not); and so on. On top of all that,
a separate process that often stands between you and your refund is joint Committee review. Preparation of
the required documentation begins with the IRS, and the process culminates in review by the congressional
Joint Committee on Taxation (JCT). We focus here on the various stages of the joint Committee process.


Ouestion: When is Joint Committee review required, what

                         should you expect, and how can you help the

                         process along?

                         Before Treasury  issue your large refundor credit (more than $ million for a C corporaion or more than $2
                         million for other taxpayers), the refund generally must be reported to the congressional JCT for review.
                            Types of large tax refunds that generally require JCT review are income, estate, gift, and some excise tax
                         refunds. In determining whether your refund exceeds the threshold amount for a single year or group of
                         years reported together, the IRS follows somewhat complicated rules (spelled out in the Internal Revenue
                         Manual) as to which amounts should be included and which refunds and deficiencies should be combined,
                         and in which order (including what types of refunds must be combined--importantly, tentative refunds are
                         separated from other refund amounts, as required by statute).
                            Tentative refunds generally are not subject to JCT review until the source year has been audited. The IRS
                         also has discretion to issue refunds or credits attributable to certain disaster losses (deducted for the year
                         before the loss) prior to JCT review.
                            Tip: Although you usually need to wait until all issues that were raised for the refund year (or group of tax
                         years in a multiyear case) have been resolved, you may be able to obtain JCT review of a minimum refund
                         prior to resolution of certain unagreed issues, if you are entitled to that refund regardless of the outcome of
                         the unagreed issues and it will take substantial time to resolve those outstanding unagreed issues. This might
                         apply when unagreed issues, for example, are awaiting the outcome of pending litigation.
                            A refund resulting from a court case that was resolved by a judge's opinion is not reviewed by the JCT whereas
                         a settlement that results in a refund over the ($5 million or $2 million) threshold amount does require JCT review.

                         First Step:  Preparation by IRS of Review Package
                         When  congressional iCT review is required at the Exam or Appeals stage, IRS personnel who specialize in
                         JCT reporting assist with preparation and assembly of the Joint Committee report and accompanying docu-
                         ments. The report provides context and explains the reason(s) for the refund. The supporting documentation
                         includes tax computations, the Revenue Agent's Report, any Appeals reports, closing agreements, Form 870
                         and/or Form 870-AD,  and so on.
                            One  of the most time-consuming steps in the process of preparing the review package for a complex
                         multiyear case is the creation of the tax computation spreadsheets, which take into account carrybacks,
                         carryback limitations, etc.


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