There is a penalty for failure to file correct information return by the due date. This includes 1099s. You may be able to avoid the penalty if you can show reasonable cause for not filing the returns. You may also need to establish the nature of the relationship that existed between your company and the mechanic, was he an independent contractor or an employee? On a separate note please ensure that you have submitted all other returns that are due including form 2290 for taxable highway vehicles, if this is applicable to you.