ID-Theft - Received 1099-Misc for Royalties but it is not mine. How to deal with it?

[sunshinejoe]

I received a 1099-Misc from a company called Zazzle Inc. The info on the form matches 100% but I have never had an account with them. Royalties received were $16.  ID Thief opened account with my info (from data breach leak) and had his/her own PayPal payout account. 

I contacted the IRS ID theft dept, who made notes on my account. Zazzle Inc (a helpless company) closed out account but could not do anything else. Luckily it was just $16 but it is not mine. I do not know how to move forward.

I am facing the dilemma: should I report it in my taxes and call it a day? Should I NOT report it in my taxes and wait for the IRS come after me with an explanation? Should I report it anywhere else?

Thanks for the advise.

[KrisD15]

You can enter the 1099-MISC so it shows on your return and then "Back-out" the income. 

Enter the 1099-MISC under

Wages & Income

1099-MISC and Other Common Income

Income from Form 1099-MISC    START

Enter the 1099-MISC as it was reported,

Type something like "ID Theft reported" in for the description, 

Select "None of these apply" for uncommon situations, 

"NO" not like main job, only got it in 2024,  

"NO" no intent to earn money, 

DONE

Once that entry is done, go to:

Wages & Income

Less Common Income

Miscellaneous Income, 1099-A, 1099-C    

Other reportable income    START

Type " to nullify a fake 1099-MISC" or something similar for the Description 

Enter the amount of the 1099-MISC (-16)  AS A NEGATIVE NUMBER  (put a minus sign in front (-) )

This gets the form on your return (Schedule 1 line 8z) as well as zeroing-out that income 

[sunshinejoe]

Thanks for the response. I tried to follow your directions to the 't' but I could not get to it successfully. After entering 1099-INT there was no description box or anything to type as suggested. Also, the " to nullify a fake 1099-MISC" yielded no results and could not get that done.

Please advise. Thanks!

[sunshinejoe]

KrisD15, do you have step-by-step instructions applicable for 2024 Turbotax?

I can't replicate your instructions. Thanks

[DianeW777]

Yes. You can keep the 1099-MISC in your tax file with notes about speaking with the IRS and do not enter it at all. On the other hand you can enter the income itself using the steps below and then entering as a negative figure as well to remove it from your tax return.

To delete this form --------------------. 

• If you're using TurboTax Online software and need to delete a form, click here.
• If you're using TurboTax Desktop software and need to delete a form, click here.

Other Miscellaneous Income:

1. Sign into your TurboTax Online account
2. Go to Tax Home (left panel)  Wages and Income  section
3. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
4. Select Other reportable Income > Enter a description (----) and the amount
5. Repeat steps 1-4, then enter your description ID Theft and a negative equal amount (-16)

@sunshinejoe 

[Edited: 03/15/2025 | 8:13 AM PST]