Probably. Even if you are running the business on behalf of someone else, if income is being issued in your name from any of the clients or patrons of the business (such as on Form 1099-MISC), the IRS will trace this income back to you. Thus, if you do not report it, you will have a great amount of taxes later on.
Thus, if the income is not yours, you have two options. Option number one is to reconcile the business on your return to the extent of the expenses that may be claimed in your behalf (such as contractors paid by the business), and then issue a 1099-MISC to the individual to whom the income belongs, or simply issue the 1099-MISC to that individual and allow them to take care of reconciling the expenses themselves. But if no one reports the income, the IRS will hold you responsible for the taxes on that reported income.
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