"We cleared the air," Tannehill said. "There's no problem there."
The Dolphins would save $6.9 million on the cap with $5.2 million in dead money this season by cutting Wallace with a post-June 1 designation, according to OverTheCap.com.
Tannehill told the Herald that the Dolphins asked him his thoughts on a potential Wallace return and have considered his input. Tannehill said he doesn't know how the situation will play out.
The Dolphins will have completely blown up their receiving corps if they drop Wallace. The team has already parted with Brian Hartline and Brandon Gibson. Charles Clay's Dolphins future is also unclear; the team used its transition tag on the tight end, leaving the possibility he can be signed by another team in free agency.