Approximately 3 years ago I was on unemployment and I waived the option to have federal taxes taken out. Afterwards, I began receving letters from the IRS saying I owe $500. In 2009 my tax return was only for $400 so I plan to wait a year so I could file two W2 form at the same time which should of put me in the green. However, I went online to file my taxes and now they're saying I owe $1100, and with both W2's(2009 and 2010) came up to $800............... How did a debt for $500 turn into $1100.

Interest & penalties imposed by the IRS.

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I called the irs and it appeared that someone fraudently file in 2007 using my info.......