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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

A secondary TC 290 .00 will not be input when a TC 150 return has not been received. Refer to IRM 25.23.4.3.1, CII and IDRS Case Controls, for additional information.

Adjustments to AdvCTC will only remove the credits on an account received by the invalid taxpayer. The valid taxpayer will receive the correct amount through systemic recalculation for future payments. When all advance payments for the year have been issued, the taxpayer will be able to claim any amount not received when filing their tax return.

Each advance payment must be considered separately to identify if any were issued to the invalid taxpayer.

All payments issued to the invalid taxpayer will be addressed separately.

Streamline IDT Cases: Follow procedures in IRM 25.25.4.6, Reversing Identity Theft (IDT) Lost Refunds.

Non-Streamline IDT and Invalid Joint Election (IJE) Cases: Follow procedures in IRM 21.5.2.4.23.10, Moving Refunds.

CTCUP Updates: Follow procedures in IRM 25.25.4.6, Reversing Identity Theft (IDT) Lost Refunds.

When adjusting the account to remove the credits associated with advance payments issued to an invalid taxpayer, a separate adjustment must be input for each. Attempting to adjust the account by using the total amount lost will result in an unpostable condition. Each must include the following fields required for adjustments to AdvCTC:

DATA-REF-1>: 272

REF-CHG-1> the number of dependents used to calculate the amount of the credit (can be found on CC IMFOLE)

Credit Reference Number (CRN): 272

Reason Code (RC): 000 (first position), the applicable RC for the month of the lost payment (second position), RC for the appropriate filing status scenario for manual adjustments (third position)

When AdvCTC payments were issued as a paper check, review the scenarios below prior to taking further action:

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

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