Hi! My husband is in the military & we were in Japan for the last 3 years. I worked as a Vendor or Sales Agent for 7days less than 40hours for a Jewelry Company that had a short term sales event at the Military Exchange Store. For all I know the income is tax free. Now, I received a 1099Misc. Do I need to claim/file that, too? I am worried that it might change our returns and would show that I worked or employed.
Please help...
Thanks,
RO

You DID work, as an independent contractor.

You need to amend the return for the year in question, reporting the income on Schedule C and using the net income to calculate the self-employment tax on Schedule SE.

Better for you to amend the return and fix the problem. That way, the IRS will probably listen when you ask them to waive the late filing and late payment penalties. If they come looking for you, it is less likely they will be so forgiving.