Level 4
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It is possible that the taxes were already paid on these transactions if those were dividends and stock sale proceeds.  The state gets the money because the financial institution holding it can't find their customer and is required to escheat it after a certain period.  Presumably, the dividends would have been reported in the year paid on a 1099-DIV, and if the taxpayer didn't report those, the IRS would've sent a matching notice.  Similar to stock sale.  If the IRS had unreported income during the matching process, the taxpayer would've received a notice.

It is possible your client may have no income to report on this transaction.