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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

Various worksheets are available on AMS to assist with verification of tax return figures.

When a math error is discovered, recompute the tax and/or credits on the valid return. Use the CII mark-up tools to edit the return with the correct amounts.

Input an adjustment using the corrected amounts, include the following:

Blocking Series (BS): Use BS 77 if the valid return was electronically filed or BS 78 when the valid return was filed as paper.

Source Code (SC): Use SC 6.

Hold Code (HC): Use HC 3 to hold the adjustment notice. Use HC 4 to hold the adjustment notice and resulting credit.

Reason Code (RC): Use RC 139 and the RCs that best describe the adjustment.

Provide a detailed explanation of the changes made using Letter 474C. In addition to the explanation, a return showing the correct figures may be included as an enclosure. Issue closing Letter 4674C to address the identity theft issue separately. See IRM 25.23.4.18.1, General IDTVA Letter Procedures, for additional information.

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

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