I recently received an incorrect 1099 from a former client with whom the relationship was severely strained. The form overstates my earnings by $20,000, and I highly doubt this client will be willing to collaborate to fix this mistake. In fact, I believe this overstatement is probably on purpose and the product of resentment.

How should I proceed with this? If I report the incorrect amount and then adjust it with a deduction, am I setting myself up for a guaranteed audit?

I would appreciate any advice that will help me navigate this as painlessly as possible.

Thanks.

“In fact, I believe this overstatement is probably on purpose and the product of resentment .How should I proceed with this?”----> If the overstatement of the income on the 1099 Form was intentional that would likely constitute fraud or filing a false statement which is a crime. You may contact your client to let him/her know this. (Your client will submit a copy of the 1099 form a nd 1096 to the IRS.) or contact your attorney for the issue
“If I report the incorrect amount and then adjust it with a deduction, am I setting myself up for a guaranteed audit??”----> The IRS, in general, does audit the correct reporting nd can refer such cases to the Department of Justice for prosecution when taxpayers have overstated income for the purpose of increasing a refund( though this is not your case).