i.e. When you filed yoru taxes, you were supposed to also indicate the exercise of those stocks on a form 1099-B/8949.
When doing so you would update the "cost" of the socks exercised to be the same as the price of the stock on the day you exercised them...resulting in zero gain (perhaps small loss due to broker fees).
When the IRS saw you missed entering them on the form 8949 when you filed, they calculated the gain based on your grant price-to-exercise difference.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
