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

Do not assess the FTF penalty if the taxpayer filed a valid Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, and the return was filed by the extended due date. For 2015 and earlier years, a TC 460 was deleted during the normal weekly update (which can take up to 3 cycles). If the TC 150 was already posted to the account, the valid taxpayer may be incorrectly assessed a FTF penalty if they filed a balance due return. If TC 460 is not showing on IDRS, the following may be indicators an extension was filed:

There is a TC 670 payment with the April 15 date. Check Remittance Transaction Research (RTR) system to see if there is a Form 4868 that was filed with the payment.

The valid taxpayer’s return (generally the TC 976) is filed on or near October 15 (extension due date).

The return information was transcribed on CC TRDBV. It may show the Form 4868 was filed.

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▸Contents — Internal Revenue Manual Part 25. Special Topics

Internal Revenue Manual Part 25. Special Topics

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