01-14-2013 04:23 PM
I too have just today received a phone call from a collection agency saying that they were sending a1099C to the IRS re a debt that was (as far as I know) written off backin 1996 ..... I had lost my job and refinanced my house to settle a couple of debts and USA Bank would not settle (I guess - dont really remember) anyway, I haven't heard from them nor a collection agency in years ...SOL for Louisiana is 6 years so I am well beyond that . The collector advised that the total amt due now is $8,000 ..... I certainly didn't owe that much but as I said, I dont really remember what happened..... whatever records I had are long gone and I basically hung up on the collection agency ..... what should I do now.
01-14-2013 04:51 PM
Obligation to pay taxes on cancelled debt reported by way of a 1099c is exempt under the tax code if the taxpayer can show insolvency, meaning their debt exceeded their assets.
I would contact a tax specialist before assuming the tax obligation must be paid, particularly if a BK was discharged. That's a pretty strong case of insolvency.
01-29-2013 12:58 PM - edited 01-29-2013 12:58 PM
These scumbag OCAs are famous for these types of sleezy tactics. This is nothing more than a recalcitrant sewer server trying to damage you for a freaking bogus tax write-off. Dispute it to the end.
01-29-2013 03:35 PM
A 1099-C can be issued after a bankruptcy. However, the IRS states that you are not liable for taxes on a discharged debt. If you received a 1099-C for that purpose you would need to file an IRS form 982.
Also, a 1099-C cannot be issued on fraudlent debt.