@joanne19 thank you for your reply and clarification of the situation. Since the entity filed a 1099 , the amount would be constructively received and therefore taxed for the 2019. And because the IRS has already sent you a CP2000 for under reporting the income, it is best to accept IRS position, pay the taxes & interest and ask for a waiver of penalty ( explaining the situation). You could assert that these monies were not available to you till the re-issuance of the check but then (a) you would run up against the "constructive receipt" rule and (b) that you actually recognized the amount on your 2020 return. Else just agree with the IRS and get this behind you
IMHO
pk
