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
Identity Theft with Tax Offsets
Internal Revenue Manual Part 25. Special Topics · 2026-10-03 edition · updated 2026-10-04 · United States
Internal Revenue Code IRC 6402(a), (c), (d), (e), and (f) require a taxpayer’s overpayment to be applied to any outstanding Federal tax debt, child support, Treasury Offset Program (TOP), State income tax obligation, or Unemployment Compensation prior to crediting the overpayment to a future tax or issuing a refund. This application of a tax overpayment is called a refund offset. Refund offsets to Federal tax debts are called tax offsets.
Tax offsets may be the taxpayer’s first indication they are a victim of Identity Theft (IDT).
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