4 - Erroneous AbatementThe timely filed TC 150 return for TY 2018 is determined to be a nullity. The valid taxpayer filed a return reporting tax of $.00 and withholding of $2,500 which posted as a TC 976. Form 14039 is included with the return. The ASED for the valid return is expired. Based on the original return, the account shows TC 150 tax of $5,000, and withholding of $6,000. A CP 2000 proposing a tax increase of $2,000 based on unreported income is issued to the valid taxpayer’s last known

Example:

Internal Revenue Manual Part 25. Special Topics · 2026-10-03 edition · updated 2026-10-04 · United States

A taxpayer has not filed a TY 2019 return. The TY 2018 return is filed single with no dependents and an AGI of $90,000. This exceeds the $75,000 limitation, and EIP phase out applies. $90,000 − $75,000 = $15,000. $15,000 × 5% = $750.EIP 1: The taxpayer’s EIP is reduced by $750. The taxpayer will receive $450 ($1,200 − $750).EIP 2: The taxpayer will not receive a payment, because the $750 reduction due to phase out is more than the $600 individual base amount.

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▸Contents — Internal Revenue Manual Part 25. Special Topics

Internal Revenue Manual Part 25. Special Topics

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