So you received a letter from the IRS, what we call a "letter audit". This is good, because it gives you a chance to explain to the IRS what happened AND the IRS employees in the office you are talking to have the power to fix the situation.
So the IRS letter says that you have two HSAs and you did not disclose the second one. In the forms provided by the HSA custodian, was there an account number? If so, was it the same account number for "both" accounts? If so, point this out in your response to the IRS that this is "proof" of duplicate HSA accounts, because the HSA custodian obviously sent the IRS duplicates records, what with the same account numbers and identical numbers for contributions and distributions.
And where do you see that your distributions are taxable? Was this part of the records that the HSA custodian sent to the IRS? Dispute this, but emphasize that the records from the HSA custodian are in error. This should help your argument with the IRS that that custodian's records are all fouled up.
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