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Cancellation of Debt - 1099C Form - Need Advise

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Anonymous
Not applicable

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

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.

Message 11 of 16
RobertEG
Legendary Contributor

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

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.

Message 12 of 16
Anonymous
Not applicable

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

Sorry for the late post.

 

Good news! The IRS sent me a letter about 6 weeks later saying i did not own any money! The letter I wrote to the IRS worked.

Message 13 of 16
IOBA
Senior Contributor

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

Yeah!

 

Did you find out what the debt was about from collection agency?

Message 14 of 16
CreditCrusader
Valued Contributor

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

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.

In my wallet: Apple $5,000, local CU $15,000, Bread AMEX $5,000. In my sock drawer: A few other cards Smiley Happy

Current scores (EQ, EX, TU): 787, 788, 796
Message 15 of 16
guiness56
Epic Contributor

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

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.

Message 16 of 16
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