Bizarre 1099 discrepancy issue
First time poster with a strange scenario. I am a solo practitioner attorney that does contract work. One of my recent clients, which promises to be a lucrative one, did not have a 1099 prepared when I asked for one, but gave me his taxpayer ID and told me to fill out what I needed. I did so and then submitted my taxes.
However, due to an accounting error the amount that I disclosed on my 1099 is actually almost $3500 higher than what I was actually paid/what I just learned my client listed on the 1099 he filed. This is a tenuous client that promises to become my largest one if I can hold it, and I would happily pay the extra taxes rather than disclose to him that I overstated my income because of my own poor bookkeeping (a tax attorney I am not)
With that as background:
(1) Do you think either me or my client risk any penalties or additional interactions with the IRS from this 1099 reporting discrepancy if the result is that I end up paying MORE in taxes than I should have, and
(2) Do you think that the IRS is likely to contact myself or my client for follow-up information
In essence I want to know if I have to fix anything on my return or 1099(not trying to commit fraud), and if so, is there a way to do so without involving my client and making him wise to my poor bookkeeping. Thank you for any insight.