No, but since the IRS thinks you got the money (they get a copy of the 1099-R); it can get messy.
If you received an erroneous 1099:
You have several choices:
1. Ideally, you get a corrected 1099from the payer
2. Don't report it on your return. Attach a
copy of the 1099 and a statement explaining the circumstances. You can't
e-file. From the IRS instructions for form
1099-Misc (applicable to any 1099): Form 1099-MISC incorrect? If this form is incorrect or has been
issued in error, contact the payer. If you cannot get this form corrected,
attach an explanation to your tax return and report your income correctly (in your case, don't enter the 1099).
3. Report the income as misc line 16 of form 1040 income (enter in TurboTax at the 1099-Rscreen) .
Then enter a line 21 deduction,
for the same amount. In TurboTax (TT),
enter at:
- Federal Taxes tab
- Wages & Income
- “I’ll choose what I work on” Button
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other
reportable income - Enter the number with a minus sign (-) in front. Briefly
explain at description.
4. Do nothing and hope you can explain it
away when & if the IRS contacts you
5. report the income normally and take a casualty loss on schedule A (stolen $) (you don't get a full deduction this way)
But don't you have a bigger problem: your missing money?
