Second Home investment. Need advice.

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Hi there,

I would like to get some advice on this situation I was in.

I bought a second home out of state with a previous tenant attached during covid. 

That tenant had some issues and couldn't move out on time. The mortgage company decided 

to contact me and ask my reason why and if I am committing fraud. I told them the situation, and

they understood. So during that time, I decided to get a PM to help get the tenant out.  Couple months 

later,  the tenant finally moved out, and  I can move in.  

Now I realize that the PM will give me a 1099 for rental income which means it would affect my second home right?
my CPA said if they decide to audit my taxes they will see that I made rental income and possibly try me for fraud again, she also advise me to get rid of the PM.
I feel bad because they have been doing fine work and already found someone to replace the previous tenant. 

my original goal was to live in it for a couple of months, then take it into an investment home later but now it just seems a bit out of hand.

I know I should have just gotten through with an investment loan instead, (lesson learned) but now I just need advice on how to fix this situation.