Can you deduct the fees charged by the platform on the gross amount in 1099-INT?

[rrudra]

I invest in fixed income platform that charges, say 10% fee, on all the income that they produce for me. When they issued the 1099-INT, they included the gross amount in Box 1. For example, if the gross amount is $2,000, with 10% charge, I only get paid $2,000 - $200 = $1,800. But the 1099-INT form shows $2,000 in box 1. When I contacted the platform company, they said that they can do this per IRS rules. I cannot fight this company.

Since $200 is not my income from 1099-INT, can I deduct this 10% charge anywhere on the TurboTax while reporting all field values exactly as in 1099-INT form on TurboTax? Or should I change the box 1 value to the net amount that I got paid? If so, will that cause any issues with IRS?

[rjs]

You have to pay tax on the gross amount of interest in box 1, not the net amount that you received. You cannot subtract the fee. Enter the 1099-INT as it is. Changing the amount in box 1 will definitely cause issues with the IRS. It's the same as if they paid you the full amount of interest, and then you wrote a check to pay the fee.