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