I received a 1099 for $6600 from American Express. The backstory is that they sent me a refund check for $1600 which was stolen, forged, and cashed. They badly mishandled the incident (by, for example, telling me they had issued a stop payment when they hadn't) and then compounded it with 16 months of further lies and mishandling.
Eventually I filed an arbitration suit against them for $100,000, which we settled for $5000 plus the $1600. None of the money can reasonably be described as lost income.
They send me a 1099 with the notation "legal settlement." I don't consider this income. Surely the $1600 is simply a reimbursement, and the other $5000 is more in the nature of punitive/bad faith damages.
Will I have any difficulty if I simply ignore this 1099 on my taxes?