We received a 1099 Misc instead of a 1099 NEC. When we received the 1099 NEC, it was not marked corrected. Issuer said all forms had already been sent to the IRS and to just file on the 1099 NEC. I don't want the IRS to double our income or give them a reason to audit us. I called the IRS and the agent I spoke with said it was above his pay grade and I should contact a CPA or Tax Attorney. (that's really what he said) How should I handle this?
No worries! What they payer should have done is created a corrected 1099-MISC sent to the IRS and yourself. Based on their comments they may have taken the appropriate steps or they never actually mailed the 1099-MISC to the IRS. It's quite possible.
It does take the IRS about two years to match the documents with the tax return. Make a note about what you were told by the payer and issuer of both forms and attach it to the 1099-MISC. As long as you have reported all of your income on the tax return, you have met your obligations.
You do not need a CPA or a Tax Attorney to complete your tax return accurately. And you are not required to report income you did not receive regardless of the document(s) issued to you in error.
Please update here if we can provide additional assistance for you.
It's possible that because the payer made the correction before the deadline for them to electronically file the Form 1099-MISC with the IRS, they have just erased the original Form 1099-MISC and told you to correspondingly destroy the one that they sent to you. However, you won't know for sure until either the IRS sends you a letter claiming unreported income or you can download your Wage & Income transcript showing the Form 1099-NEC but no Form 1099-MISC. (It can be rather late in the year before your Wage & Income transcript is fully populated.)