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›Note:
Identity Theft and Restitution
Internal Revenue Manual Part 25. Special Topics · 2026-10-03 edition · updated 2026-10-04 · United States
When restitution is court ordered, the taxpayer’s account will include references to related modules reflecting the amount of restitution ordered.
Modules with restitution references can be identified by:
TC 971 AC 18X
TC 766 with reference number 337
Do not assume the taxpayer is not a victim of identity theft when restitution references are present. An identity theft determination is made based on the facts and circumstances of the case without consideration of the restitution ordered.
If an identity theft determination has been made, contact SB/SE Examination Technical Services (TS) via email at *SBSE TECH Svs Criminal Restitution to inform them of the identity theft claim and determination. Cc: ITVA HQ on the email. Suspend the case for 14 days to allow time for TS to provide a response. See Exhibit 25.23.4-13, Format for Emails to SB/SE Examination Technical Services, for an example of an email that includes the required information listed below:
Subject: Identity Theft Claim with Restitution
Taxpayer’s name
Taxpayer’s SSN
Impacted year(s)
Identity theft determination
Relevant documentation attached (i.e., Form 14039, Police Report, correspondence, etc.)
Determinations of no identity theft (NOIDT) do not need to be provided to TS for review.
TS will use the information to evaluate the potential impact on the court ordered restitution and contact Criminal Investigation (CI). TS will provide a response and make any necessary linkage adjustments.
Upon receipt of a response or expiration of the 14 day suspense period, follow the procedures in the table below:
If
Then
(1) The response from TS supports the IDT determination made,
Take all necessary actions to resolve the account based on your determination.
Attach the initial email request and response from TS to your CII case.
(2) The response from TS provides information that indicates the taxpayer is not a victim of identity theft,
Consider the additional information:
If you agree with the information, update your determination to reflect NOIDT, and take all necessary actions to resolve the account.
If you do not agree, lead or manager concurrence must be obtained and documented prior to adjusting the account based on your determination.
Attach the initial email request and response from TS to your CII case.
(3) If you do not receive a response from TS,
Resubmit your request, including all required information listed in (4) above.
Leave a case note indicating a response was not received from TS and a second request is being submitted.
Suspend your case for 14 days.
(4) If you do not receive a response to your second request,
Take all necessary actions to resolve the account based on your determination.
Leave a case note indicating a response was not received from TS.
Attach the initial email request and follow-up email request to your CII case.
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