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

Tim and Tammy Thompson have the following income:• Wages of $130,000• Gambling winnings of $15,000• Unemployment compensation of $35,000 ($20,000 for primary and $15,000 for secondary)$130,000 + $15,000 + $35,000 = $180,000 (AGI)$180,000 − $35,000 = $145,000 (MAGI)Tim and Tammy Thompson qualify to exclude up to $20,400 of their unemployment income. They will report the following:• Wages of $130,000• Gambling winnings of $15,000• Unemployment compensation of $14,600• AGI of $159,600

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▸Contents — Internal Revenue Manual Part 25. Special Topics

Internal Revenue Manual Part 25. Special Topics

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