I split income from a misc.1099 of 22,200.I gave 11,100 with my brother in law in mar.2011.I filed my 2011 taxes in oct. 2012 because I filed an extension in april 2012(I did not owe money).I sent my brother in law a 1099 misc.in oct 2012 and the IRS. My brother in law did not claim the income for 2011.Do I owe his taxes and 20% penalty for 2011 money money I gave him? Even if I did not send him a 1099 in a timely manner,should he have paid taxes on the 11,100 anyway to the IRS?

“I sent my brother in law a 1099 misc.in oct 2012 and the IRS. “==========>You also needed to send a copy of 1099 and 1096 to the IRS; The 1099 due date is January 31 of very year , 2012 in your case. The "Copy B of the 1099-MISC form must be mailed to the recipient by Jan31, 2012." The due date was extended to February 15, 2012, if you are reporting payments in boxes 8 or 14.The "File Copy A of the 1099-MISC form must be filed with the IRS by February 28, 2012." For Taxpayers that file electronically, the due date was extended to April 2, 2012.
“My brother in law did not claim the income for 2011.Do I owe his taxes and 20% penalty for 2011 money money I gave him?”=========>No; your BIL is responsible for the taxes/penalties UNLESS he reported the 1099 income on his return. Your BIL must report the income documented onhis 1099-Misc form to the IRS; your BIL had to include ALL the 1099MISC income on Sch C/SCh SE and his 1040 as it was his icnoem , NOT yours. As the 1099-misc was pay for work your BIL did, then it’s considered from self employed work pay. Your BIL must report it.
“ Even if I did not send him a 1099 in a timely manner,should he have paid taxes on the 11,100 anyway to the IRS?”============>Correct; as said previously, they are supposed to mail it by Jan 31st, 2012. So, your BIL should have reported the income anyway ; as long as he reported the income....no problem. Your BIL had to file a form 1040x and amend the return before April 15 2012( AS LONG AS HE ALREADY FILED RETURN W/O THE 1099) to avoid any penalties and interest on any money he might owe.However, the standard late penalty is $50 per late 1099. If you file copies of 1099s late with the IRS, but within 30 days of the due date, then the IRS assesses a penalty of $50 per late 1099. The penalty is capped at $75K for small businesses, and at $250K per year for larger businesses. If you are running more than 30 days late on your Form 1099s, but complete and submit them by August 1, the IRS may assess a more severe penalty of $60 per late form, up to a limit of $200Kper year for small businesses, and up to $500K per year for others.