history:
There was a damage to our property (actual repair costs well over $125k). We hired an attorney and sued for the repair cost and nothing more.

we settled out of court for $100k. the settlement fund was deposited to an IOLTA account for the benefit of me.

lawyer took the balance of my retaining fee (it has been accuring a lot during the last few weeks of the process) from the settlement and forwarded the settlement balance ~$80k

come tax time, MY lawyer sent me a 1099-MISC with the amount of the balance of the settlement fee. First he put it in Box 7 "non-employee compensation". When I pointed out that the settlement is not wages, he sent me a 1099-MISC correction with the same amount in Box 3.

We filed the taxes, and deducted the 109--MISC Box3 amount in LIne 21 - settlement amount for property damage repair suit.

then we get a letter from the IRS saying that we owe them about $2k in self employment taxes (the amount makes no sense, btw. SE on $80 should be about 5x that..). I send them the copy of the settlement, the claim, the 1099-MISC corrected.

but then they rejected saying our information was not sufficient. and I need a corrected income statement from my lawyer. When I called my lawyer, he found out that although he sent me the 1099-MISC correction, he never filed the correction with the IRS!

So, if he files the correction to the 1099-MISC, and i get a copy and a statement that he filed the correction, and then send that to the IRS, will this go away?

or is there something else I need to worry about? (like, I don't understand how IRS came up with $2k in taxes.. it's not based on $80k box 7 error?)