They're asking for your payroll reports?  You used TurboTax Quick Employer Forms to prepare your payroll but didn't make any copies?

Yes but I work alone and have never had a payroll. How should I address this issue? I'm under exemption now and was under exemption when I purchased the insurance. There was a side job that I was doing for a couple months and the contractor wouldn't accept my exemption so I got the workers comp insurance then cancelled it when the job was done. I never used the Quick Employer Forms so how can I address this issue?

The audit notice should tell you what they are looking for.  When I've gone through a work comp audit they are just looking at my employee payroll...if you don't have any, I'm not sure what they will be asking for.  If he audit notice isn't clear, call the number and ask them what you need.

Thanks for the info. I already spoke with them and they weren't very helpful but the information in the letter they sent indicates that I must provide a copy of Schedule C if I can't provide the payroll information. I do not have employees so I do not have a payroll. Also I can't seem to get my tax return to download properly from the website, although I didn't have a problem downloading a copy of my return from the previous year. It seems like they're just interested in taking more funds from account which is legal for them but more like a way of taking advantage of a small business owner who made an error in trying to generate some more income and signing up for insurance that was not actually needed.

You've already paid the TT fees for this years return but you can get it to print out?

I think @DoninGA  is around here this morning, he can probably provide instructions for printing a current year return.  Im not well versed in the Online versions of TurboTax