A new Internal Revenue Service webpage can help clients whose large refunds are subject to review by the Joint Committee on Taxation.
When taxpayers claim a federal tax refund or credit of more than $2 million (or $5 million for a C corporation), the IRS must review the refund or credit and provide a report to the JCT, a non-partisan congressional committee. These refunds are known as “Joint Committee Refund Cases.”
The webpage covers the definition of a Joint Committee Refund Case and how the IRS handles one and what involved taxpayers need to do.
The IRS notifies taxpayers who have Joint Committee Refund Cases that are subject to review. These cases may arise from:
- Refund claims for previously assessed and paid taxes. A claim may be made on an amended return or be made by a claim submitted during an examination. A refund claim would be reviewed by the IRS and reported to the JCT before being paid.
- Tentative refunds from tentative carrybacks of net operating losses, capital losses or credits. A tentative refund would be paid prior to IRS and JCT review.
- Refunds or credits of income taxes due to certain losses from federally declared disasters.