I got a 178k irs bill from selling a house 2 years ago, I received little of the proceeds as they went to pay off the loan amount and fees. What did I miss in my filing?

Chances are you received a Form1099-S for the sale and the IRS is looking for a Schedule D to reconcile it.  Without it, they are assuming that the entire proceeds for the sale are taxable, when they almost certainly are not.  So what is the situation of the sale?  Please note:

1. If the house sale was your main home (your predominant residence) in at least 2 of 5 the previous 5 years before the sale, you haven't used the Sale of Home exclusion in the last two years on another home, and did not gain more than $250,000 (or $500,000 if filing married filing joint), the gain from the sale can be excluded.  By gain of sale, this is the sales price minus the "basis", which is the buying price plus other qualifying expenses that raise the basis.  If this is your situation, call the number on the IRS notice and ask them what information you need to provide them to show that the income was excluded from income.
2. If the house was a second home (not used for rental), then you needed to report the sale on Schedule D.  In this case, you pay tax on the gain of the sale, that is, the selling price minus the basis.  Schedule D requires you to report both the purchase price and date of the house, as well as the selling date and price.  (Closing costs you paid either when you purchased or sold the home can be added to your basis, as well as any major renovations you may have performed.  These expenses reduce the gain on the sale).  If you owned this house for one year or less, you will pay tax at your marginal tax rate; if one year and one day or longer, then you pay the more favorable capital gains rate.  (0% if you are in either the 10 or 12 percent bracket, 15% if in all other brackets except the top bracket, and 20% if in the top 37% bracket).
3. If the home was used for rental, then it receives the same treatment as above, but in addition, you will also pay ordinary (marginal rate) tax on depreciation recapture.  The IRS provides that if you could have deducted depreciation in past years, you must claim that depreciation as income when you sell the rental (even if you decided not to claim it at the time).  

Chances are that the letter you received does not require you to file an amended return.  But you will have to prepare Schedule D and send that to them in your response to the letter.  (You can call the IRS and fax documentation to them as well).  If it turns out you need to send Schedule D, and the original return was prepared in TurboTax, please see the following article:  Where do I enter the sale of a second home, an inherited home, or land on my 2019 taxes?  (Note:  in TurboTax, to prepare Schedule D, it will be necessary to set up an amended return in the correct year, and then follow the instructions above.  You will not need to send the amended return, however, unless the IRS asks for it.  Just the Schedule D.  If rental activity was involved, then you will also file a Form 4797 that reports the depreciation recapture.  All required forms are produced through TurboTax).