A little background:

In May of 2010, I subleased my apartment to a friend of a friend. She was performing a fellowship and they paid for part of her housing. The fellowship organization sent me a check of $1000 and I consequently used that money towards paying the rent of the apartment I was subletting out to her.

However, I recently received a notice from the IRS saying that I owe taxes on the $1,000 I received. Apparently, the fellowship organization filed a 1099-MISC, which I did not receive, stating that they paid me $1,000 in income. Since it wasn't technically income, paying the IRS penalty would be like paying for income I never earned.

I am wondering how to go about resolving this issue. I have thought about filing an amended 1040, but how would I show the IRS that the so-called income wasn't income at all. Or should I contact the fellowship organization and get them to amend the 1099-MISC. Please advise.

Thank you!