On their 2006 1099-MISC forms, my retired parents were paid in Box 7 (Non-employee compensation) as "independent contractors". This is the first time they have received these. In addition, they had worked whenever healthcare service agencies needed them, and consequently they have never "owned" or registered a "business". Is it correct that the IRS usually considers this to be self-employed business income? - Which would mean that they would be required to report on Schedule C.
Do they have to have registered a "business" or do they now have to obtain a Business Tax ID Number (EIN)? Lastly, they worked on-and-off: should they have paid during the year and does this mean they will be penalized? What can they do?