@ketchmm wrote:
so by amending this, it will update what my taxes owed will be? Will it also suspend any actions by the IRS as far as sending letters and/or progressing to a possible lien stage for non payment of their original amount they said i owed?
The IRS is taxing the entire proceeds, because they don't have to give you credit for anything (such as basis) unless you put it in writing.
Generally, you should start by preparing an amended return to recalculate your tax and see if it is different than what the IRS proposes. If you disagree with the IRS assessment, you have to follow the steps in your notice. That usually means that you write a letter of explanation, and send the letter and your amended return (as proof of your calculations) to the office that sent the notice, instead of mailing the amended return to the usual address for that type of return.
But it depends on what the notice says. And don't delay, if the notice has a deadline and you miss it, you may be deemed to have waived your right to challenge the assessment.
