Just got a shocking tax bill from the IRS due to cashing out a brokerage account even though I paid yearly taxes. Could this be right?

Well I’m still in a little bit of shock here. Almost a “ready to throw up” shock.

In 2021, i cashed out an account that my mother opened for me 30 years ago. She put money toward it until I was 18.

I’m 95 percent sure I paid taxes on it every year…for as long as I can remember.

This is not a “I’m going to pretend I forgot,” type of thing. For whatever reason I didn’t give this info to my accountant last year. Not because I was trying to hide it. In the back of my mind it was likely a “I already pay taxes on it so why would it be income if I cash it out?”

Well, the IRS corrected it in the letter showing that it should have been listed as income.

My questions:

1. Should it have been listed as income if I already paid taxes on it every year?

2. If it should have been, why didn’t the company send me some sort of tax document showing it as income? Some sort of 1099?

3. If I do owe this money, $4000 of it is a “penalty” for being wrong by a certain percentage. Is there any way to get out of that?

I’m obviously going to pay if I fucked up. I just don’t understand how something that I’ve been paying taxes on my whole life would suddenly be income.

Thanks for any help.

Edit: I’m guessing I should’ve gotten a 1099-B? I definitely never got one of them.