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

Reminder:

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

Adhere to the following adjustment considerations, as appropriate:

HC 4 is to be used for any account condition requiring the credit to be held (e.g., a missing signature on the valid return).

Include Priority Code (PC) 1 in the adjustment when sending the return for DIF scoring.

See IRM 21.4.4.5, Preparation of Manual Refund Forms, for additional guidance on issuing a manual refund. After closing your CII case, open a monitor control base with the Category Code MISC to monitor for the posting of TC 840, as required.

Additional general information can be found in IRM 21.5.2.4.19, Verifying Complete Adjustments.

(5) There is a lost refund,

Input TC 470 when the CN owner will not have a balance owed as a result of the actions taken to resolve the IDT issue. For streamline cases, see IRM 25.25.4.6, Reversing Identity Theft Lost Refunds, for specific guidance.

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▸Contents — Internal Revenue Manual Part 25. Special Topics

Internal Revenue Manual Part 25. Special Topics

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