If you are reporting other income for which you do not have 1099s, you could reduce that income by the amount the 1099 was exaggerated. You do not technically have to list 1099s on your taxes, but you have to report enough income to cover all 1099s issued to your EIN/SSN.
Or -
You can write it off as rebates/refunds paid as seen below. This is also commonly known as refunds and allowances.
Either of these would be an acceptable workaround. Your client is the one being untruthful because it sounds like he is overreporting an expense.
https://ttlc.intuit.com/replies/6564651
