In 2005 and 2006 I worked as ceo for a start up company as an independant contractor. At the time, my consulting company received fees and stock (not options) which vested when I departed. few weeks ago I received a draft 1099M for millions of dollars against an apparent 2007 stock valuation. when I contacted the company, the company agreed to send me a 'void/zero' 1099m, agreeing that it was an error since the stock was issued to a company and not me personally. howeber. the 1099m was filed with the irs.
question: if the company files now the corrected 1099m (zero) what is the probability for an irs audit? what do I need to do regarding my 2007 tax return?
Thanks

In itself, I don't think there is a probability of an IRS audit. The amended 1099-Misc is reported on the 1096-Annual Transmittal Letter. This is a very common occurrence, that is, a filing of an amended 1099-Misc/1096 Annual Transmittal letter.

I really don't think you should be particularly concerned about this since it was not originated from you, and it is more of a concern to the issuing company.

So, I think there is "Zero" possibility of an audit being triggered from this event itself!

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Thank you so much for the replay. Should the irs contact the company, they will claim that the 'value' of the stock stands and it was issued to my consulting company rather than me personally hence the zero 1099. would I be better off rebutting their information which will challenge their valuation and include all relevant information? (e.g. they obtained the high valuation in order to increase their 2007 write-offs not thinking about my tax event)

I am not very clear, did you mean to say the company corrected the 1099-Misc by amending the payment sent to you and instead showed a payment to your company?

Now, if there is an IRS inquiry, I would at that point hire a CPA to review your specific situation as it sounds quite complicated. There could be some valuation issues that may be involved in this case. I would recommend that you find a competent and experienced CPA to handle your case.

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Maybe I was not clear. The company filed an amended 1099 and 1096 at zero value since the stock was issued to my consulting company and not to me personally. In the event the irs will inquire, the company will receite the above reason for the correction. You are right that I still have to deal with the valuation, which was zero but the company needed the deduction and produced a high valuation in order to record the expense.
Can/should a company file an 83b election?