I am aware of times two people work together on a project but they are not really partners. For example, two lawyers who work a case together. In such cases, it sometimes happens that one person gets paid all the money and then splits it with the other person. In this case, the person who paid you may send you a 1099-Misc for the whole amount. Issuing a 1099-Misc to the other person in order to show you didn't make all that money yourself is common practice in such cases. How that works on your tax return (typically on a Schedule C unless you have an LLC or Corp) is that you report the full income. The IRS does check 1099's that show your name on them against the income you report, so you need to report it all. Then show your payment to the other guy as an expense. But the IRS won't adjust that for you. You have to show your expenses on the tax return when you file it.If you are truly partners in a business, you will need to file a business tax return and that return will show each of you how much gets reported on each of your tax returns (using form K-1). No 1099 would need to be issued to him/her in that case. If you have issued an incorrect 1099, you will need to send a corrected 1099 with zero on it.