They also checked box 2b which says "Taxable amount not determined", but the IRS has ignored that check and focused on the taxable amount for the deficiency.Does anyone have any guidelines, a court case, lawyer recommendations, etc. that could help me defend myself in court?

I’ve already started the calling process and got about 10 in and wanted to check here before to make sure I wasn’t wasting my time before I continued.

@Johann VillalvirThe first thing I do when looking at a rehab is check the permit history

If they don't know you, there is usually a lot of hesitation towards heavily leveraging the purchase and rehab of a home to someone that they don't know well.This is a good start (posting and being active on BP), but checking in with local REI groups and reaching out locally won't hurt either.

Metal water pipes start filling in as they get older, check the water pressure to see the condition of the pipes and for leaks and don't forget to check for leaks in the drains. 

Have a 3rd party check this and don't just rely on the GCs word (trust but verify).

I have to blindly give you a check, there's zero recourse for you to not mention a thing about the property, and there is nothing I can do about it.

Like others said, check with the city first.

You can check our most deals & reviews where we have helped other BP members here:  Pfabulous Real Estate/eXp Realty | BiggerPockets - click on deals tab or reviewsHappy to set up a time to chat. 

I'll check those out