TAX

I purchased a home in Florida 2006 and had my parents added to the deed. The note was and is solely in my name. In 2007 I had my parents removed from my deed because I was thinking of selling. Now in 2010 I receive a letter and form that I must fill out from the IRS stating that I may owe tax. When I called the lady at the IRS she stated that I need to see what the unpaid balance of my loan was at the time of the quit claim and Divide that by 3 then take that amount and x's by 2 and that is the amount I will be taxed on. What I don't understand is how can they take a loan that is in my name only and tax me again. My parents have had nothing Financially with this home. And on top of it they are charging me interest during this whole process