I think that we all are in agreement that when you receive a prize in a contest, there is a manufacturers suggested list price and a true selling price for the item involved. A good accountant will make the case for you and save you a great deal in taxes, depending on the type of prize involved. If the award is frequent flyer miles, there is no way that they should be valued at 2 cents a mile. There are too many articles out there that will support a lower value claim. If the prize is really small in value, it probably doesn't pay to spend your time and money to contest the 1099 and fight the IRS.