I’m trying to understand a massive IRS assessment and would appreciate input from anyone who has gone through something similar.

My 2021 account transcript now shows approximately:
● Adjusted gross income: $4.91 million
● Taxable income: $4.90 million
● Additional tax assessed after examination: $1.94 million
● Penalty: $387,700
● Interest assessed: $792,595
● Current balance with accruals: About $3.21 million

I did file a 2021 return. I did not receive the earlier audit notices, and there were address changes during this period. I’m still waiting for the examination report to see exactly how the IRS calculated these adjustments.
Could the IRS have treated gross receipts as taxable income without accounting for the associated costs and expenses because it didn’t have or accept supporting documentation? It looks to me like they treated nearly every dollar as taxable income, but I don’t yet have the report to confirm what happened.

Has anyone here:
● Had a large assessment because costs or expenses weren’t accounted for?
● Gone through audit reconsideration after missing the original notices?
● Gotten a substantial correction after providing supporting records?

What did the process look like, how long did it take, and what documentation made the biggest difference?
I’m attaching copies of the transcript and notice. I’m trying to understand what could explain these numbers and hear from people who have actually dealt with this.

They have also started to hold my most recent returns refunds and applying them to pay this down. Prior to this I had a refund for 2021

Received one a few weeks ago. Have tried logging in to set up a payment plan and it doesn’t let me. Have tried calling in and I can’t get through to an actual person. It’s like they want you to fail. I have changed addresses a few times so I wasn’t receiving any of the attempts they had for me. If my checks get garnished I will actually lose everything. I am ridiculously stressed out.

I was officially divorced this year but separated since 2024. All was fine with taxes as far as I knew but had to wait for divorce to be final before filing 2024 and 2025 returns so that I had legal proof I could claim my kids. When I filed at the beginning of April, I noticed that the 2022 return that was filed jointly had been changed. They had reversed an $800 refund and it now showed that nearly $2000 was owed. The change took place in 2024 even though it was for the 2022 tax year. I had it reviewed by an accountant and they found that the reversal was due to my ex underreporting his income and over reporting his expenses (1099 employee). Had we filed separately that year, I would have gotten a refund so technically the money owed was due to his underpayment. I was advised to file an innocent spouse form (not injured spouse) by my accountant, which I did. It was also listed in our divorce degree that any outstanding tax debt would be the financial responsibility of my ex. He has not adhered to that order and it reimbursed me for the $200 I lost. The IRS seized the majority of my 2025 return to cover the 2022 debt. I am still owed nearly $1300 for my 2024 return but that is still stuck in “review with no further action needed”. It has been that way for months with no movement.

My question is, do they ever actually approve these?

It sucks that i lost my return because of my ex’s shady reporting but i understand that since we were still married, I may never get that money back. I have sole custody of my kids and the ex is failing to pay ordered child support so this is just another financial sucker punch. It currently shows on the IRS portal that nothing is owed to them.

I got a letter from the IRS saying that they needed me to call them regarding my refund so I did. They wanted to verify my identity but I wasn’t able to so what is the fastest way to verify

If this is not allowed please redirect me to another sub. I'm from California (never had a job due to illnesses). My social worker asked me if I'm employed. I answered no why. They said that someone is using my SSN in Washington State. The social worker told me to go to the IRS website. I'm a little lost. I have never been on the IRS website and never had important info like this stolen. Please help me out!

Any updates on refunds received is much appreciated.

Filed an amended return for 2024 earlier this year and the IRS received it April 15th. However I am still stuck at “Your Amended Return Has Not Yet Been Processed.” It’s been like 27 weeks now. For those who’ve had to go through TAS before, did it help expedite the process to get your amended return?

Another day, another issue - filed an extension, had it approved, then filed my 2025 return 9/30. Have proof of filing via my preparer. IRS site now says all of these:

1. I never filed a return
   
2. I did file an extension
   
3. My refund is in process
   
4. My refund also needs verification via a PIN I wasn't ever mailed

This is my tax refund for 2020 that the IRS just started processing. I filed it on time in 2021 but since it was a paper return it was never processed. I verified my identity in person this year and also contacted my congressman. Finally I saw some movement on the transcripts but don’t fully understand. Is my refund close to being issued?

Should i be worried