If you file a Sch C you enter $5K for the income to match what the 1099 the IRS got (which is why you got a CP2000 for the missing income) and report the $45K as supplies to net out only $10K on the Sch C. So if you only reported the $10K on the sch C you will amend the return ... make the correction on the Sch C and return it with the 1040X with an explanation of what happened in response to the notice you got. Be assured you are not the only person to make this error and you will not be the last.
