First, I found out there IS a miscellaneous statement. From the drop-down menus, Forms > Select Forms, then click "MISCELLANEOUS" and click OK, and then it takes you to a long list of possible forms, and about half-way down that list, Part II Item 3, 4, or 5 would work. Pretty cool, huh?

Second, to answer your question, it's a long story...

The taxpayer received a Form 1099-MISC from a company in error. She purchased some materials for this company, and then got reimbursed for the items. She did not receive any "income." It was just getting reimbursed for something.

The company issued a 1099-MISC with the amount in Box 7, "non-employee compensation." My client said she's willing to pay the tax on it just to get it over with, but the only way to report a 1099-MISC with an amount in Box 7 is to create a Schedule C, and then you have to pay Self-Employment tax on it! And either way, she shouldn't have to pay tax on money that wasn't income! 

So the correct way to deal with this, according to the IRC, is to contact the company and ask them to issue a corrected form. She did that, but the company flat out refused. She gave me the number, and I called, and they refused, hung up on me, and called her, and told her not to contact them again.

Now, if we just ignore it and don't report it at all, and the IRS actually looks at her return, they'll see this income from a company that she didn't report, and they'll expect her to pay back taxes, plus back self-employment taxes, plus penalties and interest. I've actually had that happen in another case, where the clients got a form (in that case it was a 1099-R) that they assumed was in error because they'd never heard of the company, so they just threw it away and didn't report it. 3 years later the IRS audits them, and they call me for help. I tried to tell the IRS that the form was in error. They explained that it is on the taxpayer to contact the company and get a corrected form issued. I asked, "What if they've never heard of the company?" The IRS said, "That doesn't matter. They still need to contact the company." They wouldn't budge. The taxpayers ended up having to pay all the back taxes and penalties and interest, because the IRS refused to believe that the taxpayers didn't receive the money. They figured it was more likely (and in fairness, they're right) that the taxpayers received the money but forgot about it. Especially with 1099-Rs, where it could be a TPA doing the retirement fund for an employer, and the employee may not have remembered the name of the company (or all the various different names the pension plan goes by).

So, I want to prevent that from happening in this case, by notifying the IRS that we are aware of this form, and we have contacted the employer, and the employer refused to change it and told us we aren't allowed to contact them.