By SusanStanley and Janice Flood

 In the current economic environment, many corporate taxpayers are faced with losses that when carried back will result in an overpayment of tax in excess of $2 million; any refund in excess of $2 million, whether claimed on IRS Form 1139/1045, an amended return Form 1120X/1040X, or due from an IRS examination, is subject to a review by the Joint Committee on Taxation (JCT) as required by § 6405.

(Section 6405 covers refunds resulting in excess of $2 million resulting from a claim, overassessment, tentative allowance, and disaster losses attributable to an election under § 165(i). For purposes of this article, JCT refunds may refer to any of these types of refunds).
        
In order to quell any perception of favoritism or corruption,  § 6405 was enacted. In § 6405, Treasury provides the JCT with oversight authority of all refunds in excess of $2 million. Upon completion of review by the JCT, a letter will be issued stating the JCT has taken no exceptions to the IRS findings and the process for issuance of the refund will be made.
        
Although IRS is not required to comply with the JCT staff requests for adjustments, both parties look to the review process as a way to enhance and implement better tax administration. In order to assure an efficient review process, taxpayers are encouraged to communicate openly with IRS agents, and even take ownership of the process by preparing documentation or providing information necessary to further the survey or examination.