Write a letter explaining the situation. Mail it, the Schedule D, and a copy of the difficiency letter back to the IRS, at the address that appears on the letter. You should also include a payment for the amount of tax that you really believe that you owe, if at all possible.
If the IRS is stating that you owe a really large amount of additional tax, you might want to go to a local tax professional to assist you with resolving this.
For the sake of anyone else reading this thread in the future, its critical that people respond to the FIRST letter that they receive from the IRS. Problems can often be fixed really easily with the first letter...but are often much more difficult to fix when you get beyond that point.