We overcharged a customer on many invoices for one particular item, how do I go about giving them a credit for the item and at the same time it adjusting the sales and profit in the system for each invoice?

Upload credit memo for them?

if we upload a credit memo for the item, its added back into inventory. we don't want it to do so. How do I get around this issue?

How about using a non-inventory/other charge item type?

When I look at the gross profits of this item item I want it to reflect the credit. How would I go about doing so?

but shouldn’t your inventory show higher value than you anticipate - if you do not apply CM to inventory? If you want to adjust your profit this is the only way..