Go to this IRS website for information on cancellation of debt - https://www.irs.gov/newsroom/what-if-my-debt-is-forgiven
You should have received a Form 1099-C from the lender. This forgiven debt is included as income on your 2022 tax return.
To enter a Form 1099-C
Click on Federal Taxes (Personal using Home and Business)
Click on Wages and Income (Personal Income using Home and Business)
Click on I'll choose what I work on (if shown)
Scroll down to Less Common Income
On Miscellaneous Income, 1099-A, 1099-C, click the start or update button
On the next screen, on Cancellation of debt (Form 1099-C) or the abandonment and/or acquisition of secured property (Form 1099-A), click the start or update button
Or enter 1099-c in the Search box located in the upper right of the program screen. Click on Jump to 1099-c
we don't know what the debt was for. See IRS PUB 4681, you may be able to exclude some or all of the debt from income https://www.irs.gov/pub/irs-pdf/p4681.pdf
also see form 982 which is how you would report that some or all is non-taxable.
https://www.irs.gov/pub/irs-pdf/p4681.pdf
if you are saying you don't owe Wells Fargo the money you'll need to contact them to straighten out the matter.
@slimjim67- if there is a cancellation of debt, the IRS look at that as taxable income and you have to include that in your income tax return. From the IRS standpoint, when the bank cancels a debt, it is no different than earning the income to be reported. And as with all income, there is tax to be paid on it.
Sounds like you didn't include the form in your 2022 tax return and the IRS picked it up on an audit.
Most of the time, a debt that is forgive or canceled is treated as taxable income, because you got money that you didn't pay tax on (the loan), and now you get to keep it without paying it back, so it counts as taxable income (even if the actual money from the loan was spent long ago).
The lender issues a 1099-C for canceled debt, they should have mailed it to you, and you must report it on your tax return.
Certain debts are not taxable, but they must still be reported, and the exceptions noted on your return.
We would need to know more about this debt to suggest what to do next.