Note:

The total tax, ES Penalty and the 965 installment paid are netted against the total payments. If the Total Payments are lesser than this net amount, then the difference (which consists of 965 installment due plus any other unpaid tax/penalty will be reported as the balance due with the return thus deferring the remaining 92% of the 965 tax liability.

The TC 766 CRN 263 is a faux credit that masks the IRC 965 liability on the inclusion year module or triggering event year module when a 965(h) election is made to pay the triggered liability in installments. It represents the unpaid IRC 965(h) liability (deferred amount) to be paid in installments.