The 1099-K is not entered as an actual form in the return, like the W-2 or 1099-DIV or -INT. So the IRS won't be matching it like they do with the other forms. For example, the IRS receives a copy of the W-2 and they look at your return to see if you have the W-2 in your return. They don't do that with the 1099-K since there is not a direct 1099-K entry in the 1040.
Because of this, do NOT enter the 1099-K income in the 1040. Just enter it in your S-Corp return.
In the VERY unlikely event the IRS sends you a letter, just respond that you included it in your S-Corp return. They are happy are long as income is declared somewhere and taxes paid on it.
@PAbernathyPWA
