@BrandonSF
It looks like you failed to make clear a key aspect of your situation. When you first said the background check was for a rideshare company, I was thinking of you as a customer or passenger. But when you said they blocked you from work, it made me realize that you are the driver. The money that you received is compensation for lost income from driving for the rideshare company. That means that the money IS self-employment income and IS subject to self-employment tax. So you SHOULD report it on Schedule C. It also means that you should deduct the amount you paid to the lawyer as a business expense on Schedule C, in the expenses category for "Legal and Professional Fees." That's how you avoid paying tax on that amount, and it has nothing to do with unlawful discrimination. You report the full amount from the 1099 as business income, and the amount that was paid to the lawyer as a business expense. And you don't need forms mode or any other tricks to do this in TurboTax.
