Is it possible to adjust 1099-MISC from products received for review, based on Fair Market Value?

[a-taxpayer]

I participate in a product review program with Best Buy. Best Buy uses the MSRP for all products provided, when reporting the amount on the 1099-MISC, which I think is over-reporting, given that the fair market value for the typical products provided rarely, if ever, even start at MSRP. Is there a way to properly adjust this for Fair Market Value? From what I understand, Amazon has a similar review program (Vine) and they use the Fair Market Value of products for the 1099-MISC.

[Critter]

Will you be filing a Sch C for this income ?

[Carl]

Only the issuer of a tax reporting document can make changes to that document. For your 1099-MISCs, the issuer sends you a copy and the IRS the same information. So if what you report doesn't agree with what the IRS has on their records, you'll be audited' usually by receipt of a CP-2000 notice.
This type of audit is a paper audit where the IRS corrects your tax return on your behalf, then sends you a bill for the changes they made, and the interest accrued on the taxes you did not pay because of incorrect reporting the first time. You don't need that headache.

[Hal_Al]

What box number on the 1099-Misc is the income in?

[Hal_Al · Accepted solution]

Based on past questions*, here in this forum, Best Buy  and Amazon issue the 1099-Misc with the amount in box 7. This means you have to report the income as self employment income (the merchandise is your compensation for your service of providing reviews).

There are a couple of ways of handling the difference between the 1099-Misc amount and the fair market value (FMV).

1. Show it as "Returns and allowances" on schedule C 

2. Enter it as "Other expenses" on line 48 of schedule C

Both options are covered in the Self employment interview in TurboTax.

Be sure to save copies of your documentation for the difference, in case of an IRS audit

* https://ttlc.intuit.com/questions/3942773-1099-misc-i-review-products-for-best-buy-and-was-sent-a-10...