FORM 1099-NEC - claiming tax treaty.

You first need to enter the income in TurboTax as "Other Income" and then enter a negative adjustment to remove the income. You can do that in the Less Common Income section of TurboTax, and then Miscellaneous Income, 1099-A, 1099-C

Choose the Other reportable income option. You then need to enter an adjustment to income as a negative number to cancel out the income you entered.

You can make that adjusting entry in TurboTax as follows:

1. From the Federal menu in TurboTax find Wages and Income 

2. Find Less Common Income

3. Choose Miscellaneous Income, 1099-A, 1099-C

4. Choose Other Reportable Income

5. Enter a description of the treaty and the adjustment as a negative number

You must complete Form 8833 Treaty-Based return position disclosure and include with your return. That form is not available in TurboTax, so you will need to complete that separately and attach it to your tax return that you would mail in. Here is a link to the form:  Treaty income adjustment

You can enter the Form 1099-NEC in TurboTax as self-employment income and then enter an expense equal to the income to cancel it out. That will preclude the IRS from asking about the income later on. You could also not enter the Form 1099-NEC in TurboTax and wait until you get a notice from the IRS inquiring about it, at which time you could explain what happened and that would likely settle the issue.