Getting Your Refund - Once Your Tax Disputes Are Resolved.

• Author: Margolies, Marjorie
• Position: ASK THE EXPERTS

The Expert: Marjorie Margolies

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 documents, 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.

Question: When is Joint Committee review required, what should you expect, and how can you help the process along?

Before Treasury will issue your large refund or credit (more than $5 million for a C corporation 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...