Since you received Form 1099-MISC with income in Box 3, the IRS expects to see that income on your tax return. The issue lies with the company that sent the 1099, which can't be fixed now. There is no way to report this as "non-taxable" on your return.
To avoid tax on this income, add another 1099-MISC with all the same info, except enter a negative amount for Box 3. This cancels out the income on Line 8.
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