It sounds as if your employer is in violation of a number of labor laws. First Arizona law requires that an employee
be paid at least twice a month on scheduled pay dates (or in certain cases once a month). If an employee is not paid within five days of that date, the employer is in violation of Arizona Rev. Stat. 23-351, which you can read here:
Secondly, if you are an employee, it is required that you be paid your wages as a W-2 with proper withholding taken out. You should not be getting a 1099.
Thirdly, if the 1099 contains money that you did not receive in 2007, that is tax fraud.
If you choose, you can file a complaint with the Industrial Commission of Arizona. If the employer fails to correct these violations, he could be criminally prosecuted. You also have a civil claim for damages caused by the delay.
If he did not properly withhold taxes or claimed payments that were never made, that could be reported to the IRS as a violation of federal tax laws.
I would also consider looking for another job. It doesn't sound like this guy will be in business much longer, and doesn't mind cheating his employees.
Please keep in mind that information in this forum is for informational purposes only. It is not legal advice and does not constitute creation of an attorney client relationship. Before acting on any such information, you are always advised to consult with an attorney licensed to practice in your jurisdiction who can take the time to review all the facts and laws relevant to your situation.