I received a Notice CP60 that the IRS misapplied my payment. They say I now owe the full amount due, however it was deducted from my bank weeks ago. What should I do?

Respond to them proving that they were wrong ... first start with a simple phone call to the number on the notice ... simply say "I don't understand how I could owe when I already paid ?   Please explain it to me. "  Be prepared to support the payment ... have a copy of the cancelled check or bank/CC statement showing the payment in hand.

https://www.irs.gov/individuals/understanding-your-cp60-notice

Or mail them a copy of the proof as the letter instructs you to do so.