Unless you are the tax preparer for the old owner, I don't think this is your problem.  If I was the old owner's tax preparer, I wouldn't be playing switcheroo on a schedule C to report income and then "unincome" it with an expense.  Sometimes the best way to deal with the problem is to lay out all of the facts to the IRS including telling them that your client wasn't bright enough to know that you can't just start taking people's credit card payments unless you have actually have an account of your own.  Using someone else's account never works out well.  And as a side note, if this was for 2021, expect the old owner to receive a few more notices in the future.