<prompt> Human: In 2015, I under-reported short term capital gains. The IRS is claiming it is 15000 of capital gains, but my total portfolio only increased by 1000 that year. The IRS wants me to pay 5000 on my capital gains. I have already submitted all of my trading records to the tax court which prove that my portfolio only increased by 1000 that year. The court said that I still owe the 5000. What can I do? Should i hire an lawyer or an accountant? Thanks  <response>: You sound confused. Dont look at how much your portfolio changed.Look at every sale, and see what the gain and loss was. The value of things you still own is immaterial for gains purposes.If you had 100K at the start of the year and 101K at the end of the year, but your basis was 50K at the start of the year and 66K at the end of the year because you made trades where you reinvested gains, then you had 15K in gains even though your portfolio value only went up 1K. 