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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

Note:

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

The credit amount will be half of the total computed amount. (50/50 split)

Unenrolled Spouse

An adjustment will not post to the module.

(5)

One spouse unenrolls, and

The other spouse is deceased

Deceased Spouse

The AdvCTC adjustment will post with CRN 272 .00.

Unenrolled Spouse

An adjustment will not post to the module.

When a taxpayer is ineligible for the credit (including MFJ returns), a TC 290 .00 will post to the module with CRN 272 .00. When the taxpayer is ineligible for multiple months, an additional TC 290 .00 with CRN 272 .00 will only post when the reason code in position 3 is different.

Refer to the table below for adjustment Reason Codes (RCs) specific to AdvCTC adjustments:

RC Position

Description

1

If the taxpayer qualifies for AdvCTC, this field will contain the total number of CTC eligible children, regardless of age.If the taxpayer does not qualify for AdvCTC, this field will contain RC 000.

2

This field will contain a description of the month for the AdvCTC amount:

007 - July

008 - August

009 - September

010 - October

011 - November

012 - December

3

Systemic Adjustments: This field will contain a description of the larger computed AdvCTC amount.No Credit RCs:

200 - No AdvCTC due to MAGI phase out

202 - Invalid Primary or Secondary SSN (Includes invalid due to assignment date, SSN not valid for work)

205 - Catch all (For example, all CTC children deceased, AdvCTC under $1, etc.)

206 - AdvCTC reduced due to MAGI phase out

209 - AdvCTC not reduced by MAGI

214 - AdvCTC split equally 50/50 between the primary and secondary taxpayers

215 - AdvCTC attributable to only the primary taxpayer

216 - AdvCTC attributable to only the secondary taxpayer

4

Systemic Adjustments: This field will include RC 207 when:

A non-joint taxpayer is deceased

A MFJ return and one or both taxpayers are deceased

An AdvCTC TC 971 AC XXX (other than 199) is placed on the entity (CC IMFOLE) of taxpayers to indicate specific account conditions. Refer to the table below for a list of the action codes and their descriptions:

Action Code

Description

065

Innocent Spouse (Form 8857)

198

Victim of Domestic Violence (VODV)

856

Unenrolled taxpayer (will include MISC "OPT-OUT" )

TC 971 AC 199 (systemic) is placed on the entity (CC IMFOLE) of taxpayers to document the amount of each AdvCTC payment issued (including zero amounts), the month of payment, number of dependents, and AdvCTC source (tax year of return). Refer to the table below for specific account scenarios:

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

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