There is no provision in the tax law or the IRS forms for reporting a 1099-C and excluding it from income because it's fraudulent. It's an unexpected and extremely rare situation. Since there is no provision for it on the IRS forms, there is no proper way to enter it in TurboTax. In a situation like this, TurboTax recommends that you consult a local tax professional for help. The tax professional should coordinate with your lawyer. This is not a do-it-yourself project.
