<prompt> Human: Hey rpersonalfinance,I made a throwaway for this particular issue, but I am a long time reader of this subreddit. Ive learned a lot, but now Ive encountered a problem with a previous employer that is putting me into a possibly illegal situation. Please help!The skinny:I work in film and television as a production designer. I freelance all year for many different clients. In 2014, I was offered a contract to do a piece for one of the major networks in the US. The producers seemed new but were nice and I wanted to make a good impression so I accepted. The show had to come together in a week, so I rushed to create a design proposal for the producers approval in order to begin construction. The producers approved my design but couldnt out my requested budget together in time due to what I was told was a slow corporate process. After a couple days of going back and forth about the budget, I broke my number one rule and fronted a little under 4,000 to get the set built on time. This is typically paid for by the network. This was done with the understanding that I would be reimbursed as soon as possible. The set was delivered on time, the shoot went well and I was reimbursed.HOWEVER, the producers paid me through the company as income, so it appeared as if the 4000 was money paid to me for services rendered, NOT as a reimbursement. I brought this to their attention at the time, only to be told that it would not be reflected on my taxes as income, that was just how their system worked.Fast forward to last week: I received a 1099-MISC issued by their parent company, stating that my 4000 reimbursement was non-taxed income, entered in the RENTS box. There was a note on the 1099 that stated, If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this incomes is taxable and has not been reported. Awesome.I called the company that issued the 1099 on the networks behalf, only to be told that this absolutely had to be resolved by the network itself. I reached out to the producers from the show and they have been incredibly unhelpful. My responses have included: we didnt issue the 1099, the company who controls our payroll did. There is nothing we can do about this. We might be able to get you a check to make up for the taxes youll have to pay on that sum. Unfortunately because this is 2014 earnings, the payroll company can not reverse the 1099. They are saying it would trigger an audit which would be even worse for you. What do I do? I dont want report the income to the IRS, isnt that lying? I am worried that I will be penalized for both not reporting it or for reporting it. More importantly, if I do report this as income, it will put me in a higher income bracket which will ruin my student loan repayments as they are income based. Is there some IRS form I can file to report this? Are the producers lying to me, trying to scare me with an audit? I feel like I will be audited if I do report the income, based on what the 1099 said. I have nothing to hide from an audit, but that would just be wildly inconvenient.What do I do rpersonalfinance?tldr; A reimbursement from a previous employer was paid as income, now I have a 1099-MISC stating that I need to pay taxes on it and am possibly facing a penalty. How do I fix this mess?  <response>: Im no expert, but lets say for the sake of argument that they did it wrong.On the 1099-MISC form, it says: Form 1099-MISC incorrect? If this form is incorrect or has been issued in error, contact the payer. If you cannot get this form corrected, attach an explanation to your tax return and report your income correctly.So thats what you should do.EDIT: Naturally, you should make sure you preserve any records you have that prove the 4000 was an expense. 