Clearly income in year received. Hard to imagine agent missed that on multiple audits.
But that does not make any difference, doctrine of constructive receipt rules since he had control of the funds on 12/31, regardless of 1099s.
I have a similar situation with a tax payment that I scheduled with the Oregon Dept of Revenue to be paid on Thursday December 28th ( confirmation saved ).
However it didn't clear my checking account until Tuesday January 2nd.
I am going to treat just like an outstanding check.