Skip to content
ChatProjectCodes

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

Anna Welsh files their tax year 2020 return which posts as the TC 976. You have made a determination of Invalid/Valid. Anna filed the return as HOH before ARPA was passed. Anna’s return includes the following:• Wages - $18,000• Unemployment Income - $7,500• AGI - $25,500• TXI - $6,850• Total Tax - $0• Withholding - $1,200• ACTC - $1,312• EIC - $2,594• Refund - $5,106Recalculating the figures with unemployment income exclusion:• Wages - $18,000• Unemployment Income - $0• AGI - $18,000• TXI - $0• Total Tax - $0• Withholding - $1,200• ACTC - $1,400• EIC - $3,584• Refund - $6,184

When it is determined the taxpayer applied the unemployment income exclusion in an amount that is more than allowable, recalculate the tax year 2020 figures based on the valid taxpayer’s information. Correct the account, as allowable. Document your determination in a CII case note. When the valid taxpayer’s return posted as a TC 976, follow procedures in IRM 21.5.4.4.1, Setting the Initial Math Error Action, to set the math error and issue a closing Letter 474C to provide an explanation of the correction(s) made.

Get a plain-English answer with a citation back to this text.

Ask AI about this code
Export this section
▸Contents — Internal Revenue Manual Part 25. Special Topics
Internal Revenue Manual Part 25. Special Topics

GoCodebook provides public access, search, citation, multilingual explanation, and practical interpretation of legally adopted building regulations. It is not a substitute for the official ICC or California code publications.