Please Help, I received an incorrect 1099
I've been having an issue for quite some time now, and to be honest, I don't really understand what has happened.
I was out of the country until October of 2005 (I had no U.S. taxable income when I was outside the country), and for my taxes that year I reported the only income I had - which was the W-2 I received from the job I got when I returned.
About a year and a half later I received a notice from the IRS saying that I had underreported income. After talking to the IRS, it seems there was a 1099-misc sent to my name (at my parent's address) with $7600 of income. Of course, I didn't report this because I had absolutely no knowledge of it and it was not my income.
I have talked to my Father, because I received the 1099 from where he worked. I don't really understand what was going on, but he admitted it was a mistake and when he tried talking to the company they wouldn't amend it or something... I have a feeling it was actually my Father's income and that he just put my SSN and name for the receipt of the 1099? I'm not sure if that was the case, or if it was simply an error.
Either way, my Father gave me a Schedule C with a 1040x to file to the IRS for 2005. On this schedule C includes that 1099 income that I hadn't reported (because I had no knowledge of it and I NEVER received it), and expenses to offset the income, so there was no net change in my tax liability. However, now I'm a little uncomfortable with the "what-if" the IRS audits that schedule C. I asked my Dad, and he said he has documentation for those expenses...
But I'm wondering, if the IRS saw that I didn't report that income, would they accept the fact that I'm now reporting expenses? I mean... if someone had schedule C expenses, wouldn't they expect the person to remember that they had schedule C income?
That's my story and my dillemma. My question is this... is there an easier way then actually claiming this income that I NEVER RECEIVED? Can I dispute the 1099 saying it was incorrect and not ever have to file an amended return? Can I just put it on the company or on my Dad to resolve it? I'm sick of trying to figure this out.