I am having a problem with the IRS. For the tax year 2009 I actively traded stocks (and lost money in the end), but the IRS mistook all my sales for being income since I didn't include a 1099R brokerage statement. This past year I got a letter saying I owed the IRS thousands of dollars, since they viewed all the stock sales as being income, which they weren't. So, I responded back to them telling them what happened, but (not surprisingly), the Infernal Revenue Service wasn't much help. This has been exacerbated since I am teaching overseas and it has been hard for me to fight the charges. They sent me a Waiver (of Deficiency? I forget it's name) and they gave me 3 months to respond, which I did a couple months ago. Thus, recently I received an IRS letter which was signed by the head IRS people and it was a summation of admittals and denials based on what I responded in my deficiency waiver. Also, this past Friday I spoke with a woman from the IRS who said I would need to contact the Underreported Income section, which I did, but I waited on hold for 15-20 minutes with no answer (I live in Vietnam now, so it is harder to get in touch with them during business hours). She said a tax professional would need to do a cost analysis breakdown or something, which shows all the stock sales and how much each one brought in gains and losses wise. Could my broker have a copy of that statement? Thus, I have been stressed out this weekend and feel I am on the verge of an ulcer or a heart attack (okay, maybe not that bad), and don't know what to do next. I don't return to the States until June. In a nutshell, my issue is the IRS is stating I owe them thousands of dollars from underreported income in 2009, but it's a simple matter of them not accounting for the stock sales, which equated to the underreported income amount. Thus, I want to fight back legally, and not owe them thousands of dollars, since I honestly never had as much income as they said. Also, I worry the IRS may do a "final ruling" where I get screwed over and they say I have to pay the amount, which I shouldn't have to. Sorry, I know I'm repeating a lot, I'm just stressed out and not thinking as clearly. Also, I am a low-income earner who has been living abroad since August 2011, so I've been under duress, I feel, to answer the IRS within their deadlines, since it takes so long to mail documents here and back to the States. Any help would be appreciated, I'm confused as what to do, I know the IRS will try to scare me into paying and not fighting, but I want to know my options. Thanks!