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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

Exception:

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

There may be extenuating circumstances which would warrant issuance of a manual refund before a systemic refund generates. Examples of these instances include, but are not limited to, a Congressional request or direction received from headquarters.

The input of manual refunds without consideration of systemic account issues can result in erroneous refunds. In addition, improper IDRS controls and lack of required monitoring can result in erroneous refunds. Prior to inputting a manual refund, review the table below for additional considerations:

Considerations

Details

(1) Credit Availability

Verify what credits and/or payments belong to the valid taxpayer.

Verify if any part of credits and/or payments the valid taxpayer is entitled to were previously refunded or will be refunded based on pending transactions on the module.

For more information about credit availability for refund or offset, see IRM 25.6.1.10.3.3.2, Limitations on the Amount of a Claim.

(2) Hold Codes

When HC 3 is used, the adjustment notice will not generate, and any resulting credit balance will be available for refund or offset.

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▸Contents — Internal Revenue Manual Part 25. Special Topics
Internal Revenue Manual Part 25. Special Topics

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