I have to pay taxes on discharged b/k?

[Changingmantra]

I got yet ANOTHER notice from the IRS claiming I owe them nearly $7000.00.  I am already paying them $188 for the next 4 years for back taxes.  Among the things they list as unreported 2006 income is cancellation of debt for $11786 from a CU that I included in an 03 bankruptcy.  IS THIS USUAL?  I was on hold with them for over half an hour yesterday and got no one on the phone.  I am on hold now.... at 7:55 am and just cant get any on the phone.

[granny031350]

no.  You need to send your discharge paperwork to the IRS along with the creditor matrix and the letter they sent you and let them know that this was discharged debt in 2003 and you were insolvent and no taxes are owed.  They will figure it out but a follow up call wouldn't hurt.  HFC did this to us.  Just took a couple months to straighten out but all ended up well.  The CU is just trying to be nasty.  They must have filed a 1099 C with the IRS

[Changingmantra]

I got a great CSR on the phone when someone finally did pick up.  Unfortunately, she could not help me because there system was down, but she spent at least half an hour on the phone with me talking about this and some other things.  I am already paying back taxes for three years with 03 being the last year... She had me check my balances due for the 3 years and we noticed that the 03 balance is significantly higher than the other two.  It might be that they added some other "cancellation of debt" as income as well since my b/k was in 03.  She told me that when I call back, make sure the CSR I speak to take a look at this.

I told her the only person I am going to talk to in the future is HER!  So I have to give them a call today then wait until next Monday or so to get her back on the phone.  If it is the case that they made this mistake for 03, then they will reduce my taxes owed and all of this would have been a blessing in disguise.

[granny031350]

well keep us posted on your results.  I know that some companies are "upset" about the BK so they do what they can to kick you when you are down.  But you were insolvent due to the BK, no taxes owed on what was forgiven in the BK.