Does Morgan Stanley report to the IRS? Because my return got rejected because my preparer said they don’t report it. Even though they sent the 1099 b

I sold stock shares in 2018 with Morgan Stanley. I sold to cover and received a 1099 B. My tax preparer asked for that page but also the release confirmation to see all the tax withheld. I filed my taxes and my federal return was approved but my state return was rejected. I go back to my tax preparer and she said the IRS said Morgan Stanley does not report it to the IRS. So now I owe over 2k in money. If they don’t report it to the IRS why do they send the 1099 b form? I’m confused.