With the Reds said to be in the market for defensive reinforcements, it had been suggested in The Sun that they may seek to raid the ranks at a Premier League rival.
A loan approach was mooted, with those at Turf Moor then said to be looking for £50 million ($64m) from any deal.
Dyche is baffled as to how such stories are concocted, with there no intention on his part to sanction a switch for an England international centre-half.
He told reporters: “There are a lot of rumours out there, and not much fact.
“The most amazing one is the Tarky one. That is just bizarre.
“It’s that time of the season, and everyone is looking for a snippet, but there is a lot of phantom stuff out there.”
While Dyche is reluctant to be drawn into a debate regarding Tarkowski’s future, his coaching counterpart at Liverpool has offered no indication that the 26-year-old is in his thoughts.
Instead, Jurgen Klopp has sought to quash what it considers to be unhelpful rumours regarding a possible move to land another defender in January.
He told talkSPORT when asked if he intended to make moves into the winter market after seeing Dejan Lovren join a lengthy injury list: “The only country that asks a question like this is England. Everything is sorted with buying players.
“We have four centre-halves. Three, maybe, two-and-a-half are injured so we’ll have to try and come through at the moment.
“We need them back but you cannot buy a fifth centre-half and say so you play two weeks and after that, the others come in.”
Liverpool appear set to make do when it comes to defensive options, with promising academy stars being introduced into the fold.
Dyche will be hoping that remains the stance on Merseyside, with Burnley needing all of their prized assets to start delivering as they seek to pull clear of a relegation battle.