The problem is I did as the CP2000 notice instructed, letting them know I qualified for the real estate gain exemption and provided supporting documents (no amended return was necessary according to the IRS) then received another letter from the IRS saying they did not receive the letter! I have 30 days or I owed against the entire amount which is astronomical and a huge mistake on their part. These are computer generated letters from the IRS so I consulted a tax attorney which will probably cost me $7,200 and lots of anxiety over the next 6 months to get this litigated properly. If you sell a home and it was the first home I sold because I lived in it for 18 years, bring your taxes to a tax attorney lesson learned.
