You can safely e-file your return with a negative income entry without increasing your audit risk. If you do the negative income entry, this still allows you to e-file, so no human eyes make contact with your tax return. Your audit risk remains the same as with any other e-filed return - LOW. As long as you keep good records, you should not encounter any issues. You can use whatever description makes sense to you, but you have limited space when e-filing. You can use 'non-wage income' 'solo 401K distribution that didn't happen', etc.
However, if you want to provide all the details (as opposed to just including the description) with the return, you would need to file the substitute 1099-R (Form 4852), which means paper-filing. If you file by mail, expect delays as the IRS is still behind with filing paper returns, and mailed returns have to manually entered and processed.
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