My son got 1099d by an individual who is not affiliated with any business but is an independent contractor himself. This man hired my son to work 6 hours a week to patrol a shopping center 2 nights a week for $10 per hour. My son had to be at the shopping center Friday and Saturday nights from 8-11PM weekly. Initially the man issued a printed statement of hours worked and handed him cash. After a couple of months he just gave my son cash at the end of every month with no documentation. Eventually the man gave my son a uniform and business cards and asked him to solicit other businesses to provide security for. This man is not listed on the state Corporate Division inquiry as affiliated with the business on the cards or uniform. This year the man issued a 1099-MISC with a vastly inflated amount in box 7. When my son asked him about it he was told that he was an "independent contractor" and to go pay his taxes.

My son does not want to claim to be an IC and deduct expenses and file SE as he did not consider himself to be an IC and did not keep track of expenses or report quarterly taxes. My son also does not want to pay income tax on money he did not receive.

He got an extension on his personal income taxes that is due October 15. It is my understanding that an individual can not issue a 1099 and this man was not really affiliated with any business and the 1099 was issued in his own name and SSN. What do we do?

" My son does not want to claim to be an IC and deduct expenses and file SE as he did not consider himself to be an IC and did not keep track of expenses or report quarterly taxes. "---->In common sense, is there any employment contract between your son and the person? If there is, then what does the contract state? Fundamentally, I bet the issue here( if your kid is an IC) is more of a legal issue( or a situation) than an issue of fundamental taxation.
Right! As an IC, your kid should make quarterly estimated tax payments, file his Sch C/ C-ez with FORM SE, and is liable for his SECATaxes with 15.3%, Soc. Sec. Taxes, as you can see.(Also if he is hired by a company, business or even trade as an IC, the company is required to obtain his legal name and SSN using Form W-9 if he will be earning more than $600 from the company or business during the year, and yourkid gets and uses Form 1099-MISC from the compnay or business to report his income to both the IRS, or etc.)
As you hire an IC, you do not have to pay any employment taxes,i.e., FICA Taxes, 7.65%, SUTA Taxes, or even other pension premiums for the IC.

In reality, as far as I know, companies including small businesses convert their regular employees to IC stastus to cut their operating costs, FICA Taxes, retiremnts, medical costs etc.As long as the employees genuinely meet the guidelines for independent contractors, then employers may convert them to that status at any time, as long as the worker is informed in advance.



"It is my understanding that an individual can not issue a 1099 and this man was not really affiliated with any business and the 1099 was issued in his own name and SSN."----> Basically, U.S. tax law requires businesses to submit a Form 1099 for every contractor paid at least $600 for services during a year. However, an individual can and should issue 1099's if any fees paid exceed $600 as said above. He would use Form 1099-Misc. He can also issue them if the amounts are less than $600 but he is not required to do so.Please make a note of this.
Please visit the web site fior further info.

http://www.irs.gov/pub/irs-pdf/f1099msc.pdf