I just received a letter from IRS that questioned whether the amount reported on 1099-MISC was business income and subject to employment taxes. The 1099 MISC income was imputer interest on a medical school loan from a Hospital I signed an employment agreement with an whom I now work for. I reported the income but there were no employment taxes paid on my return. Is this required and if so how do I report it. I don't have a business to report on schedule C. Thanks Jim

You need to explain this to the IRS.

More than likely, the Form 1099-MISC had the income listed in Box #7 (non-employee compensation) rather than Box #3 (other income). Had the income been listed in Box #3, the IRS wold have accepted it at face vale.

HOW MUCH money are we talking about?