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

When the tax offset is from a refund determined to be created by an invalid return, that credit must be returned to the originating module as part of the IDT resolution for that impacted year. For example, the TY 2019 return is determined to meet nullity criteria, and the refund from that return was offset to pay a balance owed for TY 2015. The offset must be transferred from TY 2015 to TY 2019 as part of correcting the TY 2019 IDT issue.

The Collection Statute Expiration Date (CSED) is the expiration of the time period established by law to collect taxes (generally 10 years from the 23C date). Once the CSED has expired, tax offsets cannot be applied to the balance owed. When a tax offset has been applied to a module after the CSED expired, follow the procedures in the table below:

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▸Contents — Internal Revenue Manual Part 25. Special Topics

Internal Revenue Manual Part 25. Special Topics

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