I received a 1099-MISC from a client that reflects too much nonemployee compensation. The client acknowledges but doesn't want to correct. What can I do?

[dwroberts79]

Client realizes they made a mistake, but they don't think it's important or urgent to fix, and they are telling me not to worry about it, as they apparently don't think the IRS will notice. I don't want to file for less than what's on the 1099-MISC and trigger an audit, but I also don't want to pay taxes on money I didn't earn, and the client has no interest in fixing it. What can I do to rectify this?

[Ashby]

If you are reporting other income for which you do not have 1099s, you could reduce that income by the amount the 1099 was exaggerated. You do not technically have to list 1099s on your taxes, but you have to report enough income to cover all 1099s issued to your EIN/SSN.

Or -

You can write it off as rebates/refunds paid as seen below. This is also commonly known as refunds and allowances.

Either of these would be an acceptable workaround. Your client is the one being untruthful because it sounds like he is overreporting an expense.

https://ttlc.intuit.com/replies/6564651

[dwroberts79]

Thank you. If I don't have enough non-1099 income to cover the difference, then I guess the second option might work best. If I did that, and the client decided at a later date to issue a corrected 1099-MISC (since they indicated they might fix sometime when they get around to it), would I then need to file an amended return, or would the end result still be the same?

[Ashby]

The end result would be exactly the same. I have a small business myself and I would not wait on the client to correct 1099. There's a good chance that day will never come.

[dwroberts79]

Thank you very much for your help! I appreciate it.