The IRS isn't flagging R&B against COA. They have no way of knowing that. They are flagging 529 distributions, in general because there is no form to submit showing your distribution is qualified (the TT work sheets are not sent to the IRS).
At least two other users have reported receiving a CP2000 letter, from the IRS, on 529 distributions. They replied that their child was in college and the distributions were for qualified expenses, which they listed, but they did not provide receipts.. They later received a notices saying they were in the clear.
You say "BUT it is more than the total COA displayed". In that case, you should limit your distribution to the COA.
