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 with Offsets
Internal Revenue Manual Part 25. Special Topics · 2026-10-03 edition · updated 2026-10-04 · United States
A taxpayer’s overpayment is required to be applied to any outstanding Federal tax debt, Federal non-tax debt, child support, Treasury Offset Program (TOP) debt, State income tax obligation, or Unemployment Compensation prior to being refunded per IRC 6402(a), (c), (d), (e), and (f).
A tax offset occurs when a refund is applied to an outstanding IMF, BMF, or NMF liability.
A refund will be applied as a TOP offset after verification of no Federal tax debt when a Federal non-tax debt has been identified.
When an identity theft case includes tax offsets and/or TOP offsets, refer to the following subsections for specific procedures to address the offsets while correcting the taxpayer’s account:
IRM 25.23.4.10.3.1, Identity Theft with Tax Offsets
IRM 25.23.4.10.3.2, Identity Theft with TOP Offsets
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