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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

For any cases (with no invalid return) involving AdvCTC payments that do not meet the scenarios described above, prepare and email a Form 4442 using the subject line: "AdvCTC" (or similar) to ITVA HQ. Document all research completed in a CII case note and/or on Form 4442. Attach Form 4442 to your CII case. Suspend the case awaiting a response from ITVA HQ. Upon receipt, the account will be researched. A response on how to address the account will be received within 7 business days.

Refer to the table below for cases determined to be invalid joint election (IJE) or mixed entity (MXEN).

If

Then

(1) Invalid Joint Election (IJE)

Address lost payments as described in paragraph (4) above.

Reverse AdvCTC for each lost payment. Include BS 05, SC 0, and HC 4. Post delay the first adjustment by 1 cycle and each adjustment following by an additional cycle (i.e., if reversing 3 lost payments, the first adjustment will have PD 1, the second will have PD 2, and the third will have PD 3).

Input a TC 971 AC 195 on the other taxpayer’s entity using the from account TC 971 AC 199 entity information for the transaction date and MISC filed inputs.

Input TC 290 .00 with BS 05, SC 0, RC 139, and HC 3. Post delay this adjustment to ensure it posts after all AdvCTC adjustments. Refer to IRM 25.23.4.8.1.3.1, Invalid Joint Election Consideration, for additional information.

Refer to paragraph (11) below for applicable procedures.

(2) Mixed Entity (MXEN)

Refer to IRM 21.6.2.4.8, Advance Child Tax Credit (AdvCTC), for applicable procedures.

Refer to the table below for additional letter requirements specific to AdvCTC issues:

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

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