Need some expertise help please.  

New Client M. sold his restaurant business in 2022. Sale was not reported on his return. It seems he sold it at a loss and just wanted to transfer the business so the new owner would continue with the operation. What M sold/transfer was the kitchen mobiliary that had been bought also as bulk. 

 He paid somebody to do all the needed paperwork but apparently that person also forgot to change the merchant and account information, so, credit card companies continued to pay M's bank account. For part of that year and until the correction was made, M would transfer that income to the new owner. M has good records of those payments.

Last year IRS sent a letter to M proposing changes to his tax return because credit card companies reported income from 1099-Ks as M's income.  That letter was not answer and now M has received a letter of Notice of intent to seize (levy). 

Should I go back and answer the CP2000 Response Form with an explanation?

Should I file an amend as well as give a 1099NEC to the new owner but new owner is a Partnership so the 1099NEC part may not apply? 

Should I call collections and ask for more time?  

At this point I just want to take the correct action and your advice will be greatly appreciated. 

Thank you 

How would