@myflippingfamily
If you had reported the gross sales on the Sch C properly then you could have indicated that to the IRS (who was looking for the amount to show up on the Sch D). Since you did NOT report the gross income correctly you need to amend your return to respond to the IRS notice. I highly suggest you seek local professional assistance to get this mess corrected and get education on the proper bookkeeping and income tax reporting for your self employment.
