How can this be corrected so he in not liable for the full amount?
The bottom line is, your son *is* liable for the full amount. He will need to issue a 1099-MISC to the other individual for the amount that the other individual was paid, out of the full amount reported in box 7 of the 1099-MISC your son received. While your son will still report the full amount, only that portion that was paid to the other individual will not be taxable to your son.
