Issues

The IRS Says You Had Income You Never Reported—Now What?

The IRS says you earned income you don't recognize—a 1099, a 1099-K, crypto, gambling, or canceled debt. Here's how to fight it in Tax Court.

The IRS says you earned $47,000 you don't recognize. Or that a credit card you forgot about ten years ago is now $8,000 of income. Or that the Venmo your roommate sent for rent is taxable. Or that your slot machine W-2G counts as income but your losses across other sessions don't. The CP2000 didn't fix it. Now you have a Notice of Deficiency and 90 days to file in Tax Court.

This is the substantive merits guide—not a procedural one. It covers the five kinds of unreported income that put pro se petitioners in front of the Tax Court: 1099 and W-2 mismatches, the gig-economy 1099-K problem, cryptocurrency, gambling, and cancellation of debt. And it explains the burden-of-proof rules that decide who has to prove what.

Several pieces of the landscape changed for tax year 2026. We will flag each one as it comes up.

What Counts as Unreported Income

Gross income under IRC § 61 is famously broad—"all income from whatever source derived"—and the Supreme Court extended that in Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955) to "undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion." If you got something of value, the default rule is that it is income unless a specific provision excludes it.

For pro se petitioners, "unreported income" cases almost always fall into one of five buckets:

1099 and W-2 mismatches—a third-party information return reports an amount you did not include on your return, or did include but in a way the IRS computer did not match.
1099-K from payment apps and platforms—PayPal, Venmo, Cash App for Business, eBay, Etsy, Airbnb, Uber, DoorDash, Stripe, and similar settlement organizations report gross payments under IRC § 6050W.
Cryptocurrency and digital assets—the IRS treats every disposition as a taxable event, and 2025-2026 brought new broker reporting on Form 1099-DA.
Gambling winnings—W-2G forms from casinos, sportsbooks, and lotteries trigger automated matches even when you have offsetting losses or session-level netting.
Cancellation of debt (1099-C)—a creditor's write-off can become taxable income unless an exclusion applies, most commonly insolvency.

Each one has its own rules, its own evidence problems, and its own defenses. The burden-of-proof framework cuts across all of them.

The Burden of Proof Framework

The single most important thing to understand in an unreported income case is who has to prove what. The default rule and the exceptions to it will shape every move you make.

The General Rule

Under Tax Court Rule 142(a) and Welch v. Helvering, 290 U.S. 111 (1933), the petitioner—you—bears the burden of proving the IRS's deficiency determination is wrong. The Commissioner's determination carries a "presumption of correctness." That is the starting position.

The Unreported-Income Exception (Weimerskirch / Portillo)

Several federal circuits hold that the presumption of correctness does not attach automatically when the deficiency rests on alleged unreported income. The IRS must first produce some "predicate evidence" or "minimal evidentiary foundation" linking you to the income-producing activity.

The leading cases are Weimerskirch v. Commissioner, 596 F.2d 358 (9th Cir. 1979) and Portillo v. Commissioner, 932 F.2d 1128 (5th Cir. 1991). Portillo held that a bare match of a Form 1099 against your Form 1040, with nothing more, is not a "determination" the Tax Court will defer to. The IRS must do more than match and assert.

The practical effect: if the only thing the Notice of Deficiency rests on is a disputed 1099 the IRS never investigated, Portillo gives you a serious argument that the presumption never attached at all. This rule is well-developed in the 5th and 9th Circuits and recognized in several others.

Section 6201(d)—The 1099 Burden Shift

IRC § 6201(d) is the most powerful provision a pro se petitioner has when fighting a 1099 or W-2 mismatch. It says: if a taxpayer (1) asserts a reasonable dispute with an item of income reported on a third-party information return, and (2) has fully cooperated with the IRS, then the IRS bears the burden of producing reasonable and probative information concerning the deficiency beyond the information return itself.

Two things have to be true to trigger it:

Reasonable dispute. You have to articulate a basis—why the 1099 is wrong, why it does not apply to you, why the amount is overstated. A naked denial is not enough.
Full cooperation. You have to have responded to IRS requests, produced what you could, and not stonewalled.

If you trigger § 6201(d), the IRS must come forward with the payer's records or other substantive evidence. It cannot rest on the 1099 alone.

Section 7491—Credible Evidence and Penalties

IRC § 7491(a) shifts the burden of proof to the IRS on any factual issue if you introduce credible evidence and meet recordkeeping and cooperation requirements. It is less commonly invoked in pro se cases but is worth raising in the petition.

IRC § 7491(c) is more reliably useful: it puts the burden of production on the IRS for any penalty asserted against an individual. The IRS must produce evidence supporting the penalty before you have to defend against it.

Penalty Approval Under Section 6751(b)

Most unreported-income Notices of Deficiency carry a 20% accuracy-related penalty under IRC § 6662 for substantial understatement or negligence. Before the IRS can assess that penalty, it must have obtained written supervisory approval at the right time under IRC § 6751(b). Chai v. Commissioner, 851 F.3d 190 (2d Cir. 2017) and Graev v. Commissioner, 149 T.C. 485 (2017) made § 6751(b) approval a live issue the IRS has to prove. Always raise it in your petition; if the IRS cannot produce the approval, the penalty falls.

Reasonable Cause and Good Faith

IRC § 6664(c) provides a defense to § 6662 penalties: no accuracy-related penalty applies to any portion of the underpayment for which there was reasonable cause and the taxpayer acted in good faith. Treas. Reg. § 1.6664-4 describes the facts-and-circumstances test—reliance on professional advice, an honest misunderstanding of fact or law, isolated computational error, and effort to assess the proper tax liability all count. For pro se petitioners, reasonable cause is often a stronger defense than the merits, especially where records were lost, a 1099 arrived years after the fact, or the underlying tax position was reasonable. See our companion guide on how to request IRS penalty abatement.

1099 and W-2 Mismatches—From CP2000 to Notice of Deficiency

The IRS Automated Underreporter (AUR) program matches third-party information returns against your filed return. When it finds a mismatch, it generates a CP2000—a proposed assessment, not a final one. See our companion article on how to respond to a CP2000 notice for the procedural side.

When the CP2000 process does not resolve—you disagreed, the IRS rejected your explanation, or you missed the response deadline—the next step is often a Statutory Notice of Deficiency (the 90-day letter). From that point you are fighting the income inclusion on the merits, in Tax Court, before assessment.

Common 1099 Reconciliation Problems

The mismatches that keep landing in Tax Court tend to be the same handful:

Duplicate 1099s. The payer issued the same income twice—once to your SSN and once to your single-member LLC's EIN. Under Reg. § 301.7701-2(a), a single-member LLC is a disregarded entity—the LLC and the owner are the same taxpayer—so the second 1099 is in fact duplicative. Show both information returns, show they report the same payment, and ask the IRS to confirm with the payer.
Payer overstatement. A 1099-NEC reports a gross figure that includes reimbursed expenses, sales tax, or third-party processing fees that were never income to you.
Wrong recipient. A 1099 issued to the wrong SSN—identity theft, transposed digits, or a name collision.
Reported on a different line. You included the income on Schedule C gross receipts, but the matching engine looked at Schedule 1 line 8j.
Wrong tax year. A check dated December 31 was not received until January; the payer reported it for the earlier year.
Refunds and chargebacks. A 1099-K reports gross customer payments without subtracting refunds, returns, or chargebacks.

The Section 6201(d) Playbook

If your case is a 1099 dispute, build your record around § 6201(d) from the start:

Pull a Wage & Income Transcript to see exactly which information returns the IRS has under your SSN. See how to get and read your IRS transcripts.
Contact the payer in writing for a corrected 1099. A correctly issued corrected form ends the dispute. Save every email, letter, and response.
If the payer will not correct, document your reasonable dispute on the record. State the basis explicitly in your CP2000 response, your petition, and any answers to discovery. Cite § 6201(d) by name.
In Tax Court, request the payer's underlying substantiation. Through informal discovery (Branerton) and formal requests, ask the IRS to produce what the payer actually had—contracts, invoices, deposit records—not just the 1099. That is what § 6201(d) requires.

The IRS's own Internal Revenue Manual 4.19.3 obligates AUR examiners to consider taxpayer responses rather than rely solely on the information return. The IRM does not have the force of law, but it does bind agents, and Tax Court judges read it.

Gig Economy and Form 1099-K

Form 1099-K is the information return that changed most for the 2026 tax year, and it now has its own dedicated merits guide: Form 1099-K Disputes in Tax Court. Start there for the full treatment of the threshold reversal, the personal-versus-business split, selling your own property, and how to back the non-taxable amounts off your return. The essentials:

A 1099-K reports gross payments, not income. Third-party settlement organizations—Venmo, PayPal, Cash App, eBay, Etsy, Uber—report the gross dollar amount of reportable transactions under IRC § 6050W, before fees, refunds, or chargebacks. The form does not characterize the money; whether it is taxable depends on what the underlying transactions actually were.
The $600 threshold is dead. The One Big Beautiful Bill Act (P.L. 119-21 § 70432) retroactively restored the old $20,000-and-200-transaction reporting threshold, cancelling the $5,000 / $2,500 / $600 phase-in the IRS had scheduled under Notice 2024-85. You can still receive a 1099-K below that figure, though—payment-card transactions have no minimum, some states set lower thresholds, and backup withholding triggers a form—so the dispute survives the threshold change.
Personal money is not income. Gifts, reimbursements, splitting rent with a roommate, and repaying a friend are not taxable just because they ran through an app. Personal items sold at a loss are not taxable either (and the loss is not deductible under IRC § 165(c)); personal items sold at a gain are reportable as capital gain on Form 8949. You report the full 1099-K figure and back the non-taxable portion off on Schedule 1.

The dedicated guide covers the rest: the hobby-versus-business characterization and self-employment tax, the transaction-by-transaction split for a mixed personal-and-business account, the § 6201(d) lever for disputing a 1099-K, how to pull your Wage & Income transcript to see the form the IRS actually received, and the full penalty-and-interest exposure. See Form 1099-K Disputes in Tax Court.

Cryptocurrency and Digital Assets

Since Notice 2014-21, the IRS treats virtual currency as property, not currency. Every disposition is a taxable event—sales for cash, swaps for other crypto, payments for goods or services, payments to contractors. Basis tracking is the taxpayer's responsibility, and that is where most crypto cases break down.

Common Taxable Events

Sale for cash. Capital gain or loss on Form 8949 and Schedule D.
Crypto-for-crypto swap (BTC for ETH). The IRS treats this as a taxable disposition of BTC at fair market value, with basis in the ETH equal to that FMV. Post-TCJA, § 1031 like-kind exchange treatment is limited to real property.
Payment received in crypto. Ordinary income at FMV when received, then a separate capital gain or loss event when later disposed of.
Mining as a trade or business. Ordinary income at FMV when received; self-employment tax may apply.
Mining as a hobby. Ordinary income at FMV on Schedule 1, line 8z; no SE tax; no deduction beyond income.
Staking rewards. Ordinary income at FMV when the taxpayer has dominion and control, per Rev. Rul. 2023-14.
Hard fork without airdrop. Not gross income (Sit. 1 of Rev. Rul. 2019-24).
Hard fork followed by airdrop. Ordinary income at FMV when you have dominion and control (Sit. 2 of Rev. Rul. 2019-24).

The Jarrett litigation (M.D. Tenn. Case No. 3:24-cv-01209, filed October 10, 2024) is currently challenging the staking-rewards rule, arguing that staking-created tokens are new property and should not be income until sold. The case is pending. Pro se petitioners should not rely on Jarrett as authority—report under Rev. Rul. 2023-14, and if you want to preserve the issue, raise it explicitly while recognizing the IRS will not concede.

Form 1099-DA, Cost Basis, and Bankrupt Exchanges

Beginning January 1, 2025, custodial brokers—centralized exchanges, hosted-wallet providers, payment processors that redeem digital assets, and digital asset kiosks—must report gross proceeds on Form 1099-DA. For 2025 sales the form shows proceeds only (basis reporting is voluntary that first year); mandatory basis reporting phases in for covered digital assets acquired after 2025. Unhosted (self-custody) wallets produce no 1099-DA, and the Congressional Review Act repeal of the DeFi "broker" rule (Pub. L. 119-5, signed April 10, 2025) means decentralized platforms do not issue one either—but you still owe tax on every disposition and have to track basis yourself.

Because a 1099-DA reports proceeds without basis, the IRS often treats the entire proceeds as gain. Proving your basis is the whole fight, and it now has its own dedicated merits guide: Cost Basis: How To Fight a 1099-B or Crypto Gain in Tax Court. Start there for the $0-basis trap, FIFO and the Rev. Proc. 2024-28 wallet-by-wallet safe harbor, lot identification, and how to rebuild a record from exchange CSV exports, blockchain explorers, and bank statements after an FTX/Celsius/Voyager-style failure. Default to FIFO unless you documented an alternative method, and raise § 6201(d) if the IRS reconstructed your proceeds from exchange data you dispute.

Separately, lost or worthless crypto on a bankrupt exchange may qualify for a worthlessness loss under IRC § 165(g) or, in narrower circumstances, the Ponzi-loss safe harbor of Rev. Proc. 2009-20. The IRS's position on the worthlessness of customer claims is unsettled, and pro se petitioners should be cautious—a tax controversy attorney is worth consulting.

Gambling Winnings

Gambling is the area where the rules changed most dramatically for tax year 2026, and it now has its own dedicated merits guide: Gambling Winnings and Losses in Tax Court. Start there for the full treatment of the new 90% loss cap, the casual-versus-professional split, how to substantiate your losses, and how to verify the IRS's number. The essentials:

All winnings are taxable. Casinos, sportsbooks, lotteries, raffles, and the fair market value of non-cash prizes all count, whether or not a Form W-2G was issued (IRS Topic No. 419). For 2026 the W-2G reporting floor is a unified $2,000, and online sportsbooks and daily-fantasy apps add their own 1099 matching.
You cannot net wins against losses. Winnings go on Schedule 1 as income; losses go separately on Schedule A, and only if you itemize. A taxpayer who takes the standard deduction gets no loss offset at all—the single most common reason a recreational player ends up with a Notice of Deficiency.
Gain is measured per session, not per bet. A session runs from start of play to cash-out (Shollenberger v. Commissioner, T.C. Memo. 2009-306)—but you still cannot net one session against another across the year. Each winning session adds to income; each losing session is a wagering loss on Schedule A.
The big 2026 change. For tax years beginning after December 31, 2025, the One Big Beautiful Bill Act (P.L. 119-21, § 70114) rewrote IRC § 165(d): your loss deduction is now 90% of your wagering losses, then capped at your winnings—a two-step floor, not "90% of the lesser of the two." The 10% haircut can leave you taxed on "phantom income" even in a breakeven year. Several repeal bills are pending but unenacted as of mid-2026.

The dedicated guide covers the rest: the trade-or-business test that separates a professional gambler from a casual one, why a professional can no longer deduct business expenses beyond winnings, the gambling-diary and casino-record substantiation that actually wins, the § 6201(d) lever for disputing a W-2G, and the full penalty-and-interest exposure. See Gambling Winnings and Losses in Tax Court.

Cancellation of Debt and the Insolvency Exception

When a creditor cancels, forgives, or discharges a debt for less than the full amount, IRC § 61 generally treats the canceled amount as gross income to you. Form 1099-C is the information return the creditor files when one of eight identifiable events occurs (Reg. § 1.6050P-1(b)(2)):

Code A — Bankruptcy
Code B — Other judicial debt relief
Code C — Statute of limitations or expiration of deficiency period
Code D — Foreclosure election
Code E — Debt relief from probate
Code F — By agreement
Code G — Decision or policy to discontinue collection
Code H — Other actual discharge before identifiable event

A 1099-C Does Not Automatically Create Income

The Tax Court has been clear: a creditor's issuance of Form 1099-C is an identifiable event, but it is not dispositive of the creditor's intent to cancel the debt. Owens v. Commissioner, T.C. Memo 2002-253 and Kleber v. Commissioner, T.C. Memo 2011-233 both held that the 1099-C alone is rebuttable.

A debt is actually discharged for COD purposes when it becomes clear it will never have to be paid (Cozzi v. Commissioner, 88 T.C. 435 (1987)). If you can show the creditor was still collecting, that the year of discharge was different, or that the form was issued in error, the 1099-C alone is not enough to put you in the income column.

Section 108 Exclusions

IRC § 108 provides several exclusions from COD income, in order of priority:

§ 108(a)(1)(A) — Bankruptcy. Discharge in a Title 11 case. Report on Form 982, line 1a. Bankruptcy applies before insolvency—use it if you qualify.
§ 108(a)(1)(B) — Insolvency. Excluded to the extent you were insolvent immediately before the cancellation. Report on Form 982, line 1b.
§ 108(a)(1)(C) — Qualified farm indebtedness. Limited to active farmers.
§ 108(a)(1)(D) — Qualified real property business indebtedness. Non-C-corporation election.
§ 108(a)(1)(E) — Qualified principal residence indebtedness. Discharge of mortgage on the taxpayer's principal residence. Sunsets after December 31, 2025—the 2025 edition of Pub. 4681 states that QPRI cannot be excluded from income for discharges completed or discharge agreements entered into after that date, absent further legislation.
§ 108(f) — Student loan discharge. Several categories: discharge for working in certain professions, discharge on death or total and permanent disability, and a broader ARPA-era rule that excluded most private and federal student loan cancellations between 2021 and 2025. After 2025 the broader rule sunsets and only the death/disability rule remains. A Social Security Number is now required to claim the exclusion for discharges after 2025.

Insolvency in Detail

You are "insolvent" under § 108(d)(3) to the extent your total liabilities exceed the fair market value of your total assets, both measured immediately before the cancellation. The insolvency worksheet appears at page 7 of Pub. 4681 (2025).

Liabilities include: credit card balances, mortgages and HELOCs, vehicle loans, medical bills owed, student loans, past-due mortgage interest and real estate taxes, prior-year federal and state income taxes, judgments, business debts of a sole proprietor or partner, margin debt, and other liabilities.

Assets include: cash and bank balances, real property at FMV, vehicles, household goods, tools, jewelry, clothing, books, stocks and bonds, collectibles, cash value of life insurance, security deposits, partnership interests, and other investments. Retirement accounts—IRA, 401(k), pensions—count as assets at full FMV, even though they are exempt from creditors under state law and ERISA. This catches many taxpayers off guard.

Insolvency amount = Total Liabilities − FMV of Total Assets (if positive; otherwise zero).

The exclusion equals the lesser of (a) the canceled debt amount or (b) the insolvency amount.

Two examples drawn from Pub. 4681 (2025):

Example 1. You are released from $5,000 in credit card debt. Liabilities were $15,000 and asset FMV was $7,000. Insolvency = $8,000. Because $8,000 exceeds the $5,000 discharge, the entire $5,000 is excludable on Form 982, line 1b.
Example 2. Same $5,000 discharge, but liabilities were $10,000 and assets $7,000. Insolvency = $3,000. Only $3,000 is excludable; the remaining $2,000 is COD income reportable on Schedule 1, line 8c.

Tax Attribute Reduction

Excluding COD income under § 108 is not free. § 108(b) requires you to reduce tax attributes in a set order—NOLs first, then general business credits, minimum tax credits, capital loss carryovers, basis in property, passive activity losses and credits, and foreign tax credits. Reductions are reported on Form 982, Part II. For pro se petitioners with no NOLs or carryovers, this is theoretical; for those with significant carryforwards, it is real.

Statute-Barred Debt

The IRS's position is that expiration of a state statute of limitations on debt collection does not extinguish the underlying debt—it only provides an affirmative defense to a collection lawsuit. So an old debt that becomes uncollectible by limitation is not yet "discharged" for COD purposes, in the IRS's view.

The Tax Court has ruled against the IRS in cases where a creditor issued a 1099-C but had not actually canceled the debt. The 36-month non-payment testing period that used to be an automatic identifiable event was removed effective for 1099-Cs filed after 2016.

For pro se petitioners facing a 1099-C on an old debt, defenses to consider in order:

The debt was not actually canceled. The 1099-C is rebuttable (Owens; Kleber).
The cancellation occurred in a different (often earlier) year. Discharge for COD purposes happens when it becomes clear the debt will never be paid (Cozzi, 88 T.C. at 445). If the actual discharge was years before the 1099-C arrived, the income belonged to that earlier year. If that earlier year is now closed by the assessment statute under IRC § 6501, the IRS may be barred from assessing on it. Newman v. Commissioner, T.C. Memo. 2016-125, accepted taxpayer testimony of insolvency for an earlier year without detailed records—useful precedent when documentation from a decade-old discharge is gone.
The insolvency exception applies. Run the worksheet for the date immediately before the discharge.
The bankruptcy exception applies. If discharged in a Title 11 case, use § 108(a)(1)(A) first.

In Tax Court

Substantiate insolvency with a financial snapshot as of the date immediately before discharge: bank statements, mortgage statements, all credit card statements, vehicle loan statements, retirement account statements, brokerage statements, car valuation (Kelley Blue Book or NADA), home valuation (recent appraisals, comparable sales, insurance valuation). File Form 982 with the calculation as backup whether or not a 1099-C was issued.

If the year of discharge is genuinely disputed—the 1099-C arrived years after the last collection activity—build the case for which year it actually occurred. That can shift the dispute out of the audited year entirely.

Building Your Pretrial Record

The work of an unreported-income case happens between filing and trial. Pro se petitioners who lose tend to lose here, not at trial.

Discovery and the Branerton Conference

Tax Court prefers informal discovery before formal motions. The Branerton conference (Branerton Corp. v. Commissioner, 61 T.C. 691 (1974)) is the standard first step—a meeting or call with IRS Counsel to exchange evidence and identify what is actually in dispute. Use it to ask for the IRS's underlying evidence: the payer's records, the exchange's data, the casino's player file. If Counsel will not produce informally, formal interrogatories and document requests are available.

Rule 91 Stipulations

Under Tax Court Rule 91, the parties are required to stipulate to all facts and documents not genuinely in dispute. Pro se petitioners often hand the IRS more than they need to here—agreeing to characterize a payment as "compensation" when the character is the whole dispute, or stipulating to the genuineness of a 1099 they actually contest. Read every proposed stipulation carefully. See our companion article on Stipulation of Facts—Tax Court Rule 91.

Pretrial Memorandum

Your pretrial memorandum is where you set out the burden-of-proof framework explicitly. Cite Tax Court Rule 142(a), Welch, and the Weimerskirch/Portillo predicate-evidence exception. Lay out § 6201(d)—the reasonable dispute, your cooperation, the IRS's resulting burden of production. Raise § 7491(c) for the penalty. See how to write your Tax Court pretrial memorandum.

Settlement

Most Tax Court cases never go to trial. More than 99% of cases close before trial in recent years, with most (76%) closing by formal settlement. The IRS Office of Appeals or IRS Counsel often concedes where the petitioner has built a § 6201(d) record. Make a written settlement offer with specific numbers backed by documents. See how to settle your Tax Court case.

Audit Reconsideration as the Fallback

If you missed the 90 days deadline and the deficiency has been assessed, Tax Court is closed but audit reconsideration is open. It is an administrative process where you ask Examination to reopen based on new information. It is slower and weaker than Tax Court, but for many pro se taxpayers it is the only door left.

Recordkeeping and Reconstruction

IRC § 6001 requires you to keep records sufficient to establish gross income, deductions, and credits. For unreported-income disputes, the records that matter:

1099 disputes: the payer's contract or invoice, bank deposit records, communications with the payer.
1099-K personal payments: bank statements showing source, app screenshots showing payment descriptions, contemporaneous calendars or photos for personal-item sales.
Crypto: exchange CSVs, wallet transaction history, bank statements showing fiat purchases, screenshots, blockchain explorer data.
Gambling: a dated diary with the Pub. 529 elements, player's card statements, casino ATM records.
COD insolvency: a complete financial snapshot as of the date immediately before discharge—every account, every debt, every asset, with valuations.

When records are missing but the underlying facts are clear, the Cohan rule (Cohan v. Commissioner, 39 F.2d 540 (2d Cir. 1930)) lets a court estimate the amount of an established item, "bearing heavily" against the taxpayer whose inexactitude is their own fault. Cohan does not apply to items requiring strict substantiation under § 274(d), but it can apply to gambling losses where the fact of loss is established.

When To Get Professional Help

Around 89% of petitioners represent themselves, but the win rate is lower than for represented petitioners (about 12% pro se vs. about 23% represented in the most recent NTA data). Some unreported-income cases call for help:

The amount is large enough to justify it. If the deficiency is meaningful relative to your assets, even a few hours of professional time pays for itself.
Possible criminal exposure. Large unreported cash income, repeated unreported years, or anything resembling willful evasion is not a pro se case. Get a tax controversy attorney.
Complex crypto basis you cannot reconstruct. A specialist with the tooling will find more than you can.
The IRS prepared a substitute-for-return under § 6020(b). Procedural and substantive issues compound.
You are in the 5th or 9th Circuit and the case is framed around the predicate-evidence rule. The doctrine is well-developed there.

If your income is at or below 250% of the poverty line and your dispute is at or below $50,000, you may qualify for free representation through a Low Income Taxpayer Clinic. LITCs handle Tax Court cases and many specialize in this kind of dispute. See also when to get professional help with your tax dispute.

What To Do Now

If you have a Notice of Deficiency for unreported income and the 90 days clock is running:

Identify the deadline date on the face of the notice. It cannot be extended.
Pull your Wage & Income Transcript from IRS.gov to see what information returns the IRS has under your SSN.
Decide whether to file in Tax Court. A timely petition preserves your prepayment forum; filing is $60 with a waiver available. If your dispute is at or below $50,000 per year, you can elect small-case procedures. See how to file your Tax Court petition.
Do not file an amended return after a Notice of Deficiency issues. An amended return is not a substitute for a Tax Court petition. It does not stop the 90-day clock and does not moot the deficiency. The forum for changing the deficiency is the Tax Court petition.
Contact each payer in writing for any disputed 1099 and ask for a corrected form. Document the requests.
Build the § 6201(d) record from the first response forward—articulate the reasonable dispute, show your cooperation.
Run the insolvency worksheet if any 1099-C is involved, using values from the date immediately before the discharge.
Consider an LITC if you meet the income limits—they handle these cases free.

Resources

Statute:

IRS guidance:

IRS forms and publications:

Companion articles on TaxCourtHelp:

This article is for informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, consult a qualified tax professional or attorney.