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I'm being asked by a friend - how to report a 1099-MISC being reported as "income" but is really reimbursement for expenses. It was just a wash. He paid for some expenses and the organization was reimbursing him.

He already filed the tax return WITHOUT including the 1099 (he filed early and didn't know he was going to get a 1099 which he got late). Now the IRS is saying he owes money due to the 1099.

How would you proceed? If he amended his return to include the 1099 income, is there a place to include the offsetting expenses which the "income" was a reimbursement for? Should he do a Sch C where the profit is zero?

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