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Cancellation of Debt - 1099C Form - Need Advise

New Member

Cancellation of Debt - 1099C Form - Need Advise

Hello All,


I received a letter from the IRS saying a company called Nationwide Credit Service LLC reported a $5000.00 lost on a 1099C and I now I own the IRS $800.00 in back taxes for 2010 tax year. This appears to be shady this Nationwide Credit Service buys and sells debts for a profit. 


I file BK in May 2002 and all known debt was discharge. In last 10 years have never borrow $5000.00 from any lender. I am now debt free except for house payment.


How do I fight this? I have no records of a unpaid $5000 debt. It should not take 10 years to find me.


I called Nationwide Credit Service and left message, voicemail say I should receive a call back in 3 days.


Thanks for your help!





Message 1 of 16
Senior Contributor

Re: Cancellation of Debt - 1099C Form - Need Advise

berrij01 - My suggestions


1.   Send a debt verification letter to Nationwide Credit Services.


2.  Immediately write a letter to the IRS (and send it CMRR) that says you are unaware of what Nationwide Credit Services is talking about.  That you have NOT received anything from them EVER.   And include that you have contacted Nationwide and are asking for debt verification since you are clueless about any relationship or debt with them.


Have you received anything from Nationwide before?


Do you have a copy of your discharge papers from your BK from 2002?   <--- If not, get a copy now!!   You may need it to help your case.


Let us know what you find out please.

Message 2 of 16
New Member

Re: Cancellation of Debt - 1099C Form - Need Advise

No, I have not ever receive anything from Nationwide, I am aware of.


I do have my originial BK discharge documents.


I will follow your advise.


I will follow-up when I have more information.


Thank you!

Message 3 of 16
Valued Contributor

Re: Cancellation of Debt - 1099C Form - Need Advise

Be aware that the original debt amount may not have been $5000. These debt buyers are infamous for adding fees and interest to the original debt and ending with a due amount of multiples of the original debt. If they sent a 1099 to the IRS they should have sent one to you also. Did you change addresses during 2010 or early 2011? This should have been when the notice was sent to affect your 2010 taxes. (Most likely late 2010 or early 2011).


Once you get a copy of the notice you should be able to identify the original creditor and figure out if they were included in your bankruptcy. If so it should be easy to resolve with the IRS. If not you should probably consult with a qualified tax preparer / CPA because there are some rules in which you can still dismiss the 1099 due to your own insolvency. But I'm not well versed enough on it to offer advice. Good Luck and be persistent.

Best financial advice I ever got: "Just imagine what an adult would do and do that."

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Message 4 of 16
Community Leader
Legendary Contributor

Re: Cancellation of Debt - 1099C Form - Need Advise

You need to know the name of the original creditor in order to determine, one, if you ever had any debt with them, and two, to determine, if you did, whether it was included in your BK discharge.

One of the provisions of the DV process is that FDCPA 809(b) permits the consume to require the name and address of the original creditor. 


Additionally, if the debt is that old, it has most likely expired under your state statute of limitations, which means there is no longer a legally-due debt, regardless of whether it was actually obligated. I would put all that you have stated, as suggested, into a letter to IRS, which raises with them the appropriateness of the credtior/debt collector having reported a time-barred debt as a tax writeoff.  Above all, get your questions regarding this matter before the IRS, thus indicating that you dont believe the debt that is asserted is valid.

Message 5 of 16
Senior Contributor

Re: Cancellation of Debt - 1099C Form - Need Advise

RobertEG - this seems like new, uncharted territory.    To clarify for myself, if the debt is past SOL, then the CA should not be able to report it on a 1099-C to the IRS?   It's a question, I guess.  It makes logical sense.


Do you know of any rules that would force the CA to report their actual loss, not a made up figure for a loss?  (For example, they bought the debt for $1.00 but claim Mr. XYXZ owes them $500.00.   By the time they report to the IRS and on a 1099-C, they claim the debt is $5000.00.   In reality, their loss is $1.00.)


Thanks RobertEG!

Message 6 of 16
Super Contributor

Re: Cancellation of Debt - 1099C Form - Need Advise


I don't think that the issue of sending a 1099 and SOL would be the same.    SOL only applies to the time period to bring a lawsuit, whereas a 1099 is an accounting issue.

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Message 7 of 16
New Member

Re: Cancellation of Debt - 1099C Form - Need Advise

Here is the letter I sent to IRS!



Brookhaven IRS Center

Dear Sir / Madam:


I am writing this letter because I am unaware of any business relationship with Nationwide Credit Service LLC and me.

Nationwide Credit Service sent a 1099-C stating a cancellation of debt for $5,000.00 on account # XXXXX-X  with sales dates of XX-XX-2010.


 I have never had an account with them or received a bill from Nationwide Credit Service.


 I have written a letter to Nationwide Credit Service requesting debt verification listing original debtor.


I file for bankruptcy in 2002 and have been debt free for over 10 years.

(I have enclose first page file copy of bankruptcy)


Additional any debt that Nationwide Credit Service purchased for a very low price and inflated with high fees and interest rates in an attempt to cancellation of debt for profit is unfair to tax payers.


Any debt that Nationwide Credit Service purchase involving me would be well over 10 - 15 years old and most likely expired under state statute of limitations and should be time-barred. This fraudulent debt should not be a 1099c tax write-off.


I sincerely believe this debt is not VALID!


It is impossible for me to own Nationwide Credit Service any money!


I am awaiting Nationwide Credit response to my letter to find out whom the original debtor is.


Best regards.

Message 8 of 16
Senior Contributor

Re: Cancellation of Debt - 1099C Form - Need Advise

RobertEG?   Any feedback? 

Message 9 of 16
Senior Contributor

Re: Cancellation of Debt - 1099C Form - Need Advise

Could they be greedy enough to mess with the IRS?!

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Message 10 of 16