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

Jane Hernandez files their tax year 2020 return which posts as the TC 976. You have made a determination of Invalid/Valid. Jane filed the return as single before ARPA was passed. Jane’s return includes the following:• Wages - $34,000• Unemployment Income - $8,400• AGI - $42,400• TXI - $30,000• Total Tax - $3,406• Withholding - $2,720• Balance Due - $686Recalculating the figures with unemployment income exclusion:• Wages - $34,000• Unemployment Income - $0• AGI - $34,000• TXI - $21,600• Total Tax - $2,398• Withholding - $2,720• Refund - $322

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▸Contents — Internal Revenue Manual Part 25. Special Topics

Internal Revenue Manual Part 25. Special Topics

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