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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

Reminder:

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

When the valid return is MFJ, the necessary research to determine if an extension was filed must be completed for both taxpayers.

(2) The overpayment from an invalid return was applied to a valid balance due,

Reinstatement of an Installment Agreement (IA) is required,

Prepare Form 4442, Inquiry Referral, and transmit the information via EEFax to the CSCO Operation within 24 hours. Refer to Service Center Addresses for Collection Operations to locate the appropriate EEFax. See paragraph (8) of IRM 5.19.1.6.4.13.1, DDIA - Form 433-D, Installment Agreement, and Form 9465, Installment Agreement Request, for additional information.

When corresponding with the taxpayer, inform them the overpayment applied to their balance due was removed, and they will receive a separate notice explaining the changes and amount they owe.

(3) The overpayment from an invalid return was applied to a valid balance due,

Reinstatement of a Currently Not Collectable (CNC) is required,

If the previous CNC determination is no more than 12 months old, and the total assessed balance due plus total liabilities related to the unassessed return is less than $25,000, the new account may be reported CNC without further investigation, see IRM 5.19.17.2.8, Cases Reported CNC Based on Prior CNC.

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

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