I recently had success getting a collection removed off my CRs from Equable Ascent Financial LLC. I just recieved in the mail this 2011 1099-C form from a Charge-off WAMU/CHASE acct.
I'm confused as to what this means? am I supposed to add this information when I file my taxes? I had no idea that this debt was tied to my taxes... I settled the account towards the end of 2010, I thought I was done paying it? 
"Copy B - For Debtor: This is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if taxable income results from this transaction and the IRS determines that it has not been reported"
"If a Federal Government agency, certain agencies connected with the Federal Governmebbt, financial institution, credit union, or an organization having a significant trade or business of lending money (such as finance or credit card company) cancels or figuves a debt you owe of $600 or more, this form must be provided to you. Generally, if you are an infividual, you must include all canceled amounts, even if less than $600, on the "Other income" line of Form 1040. Do not report a cancelled debt as income if you did not deduct it but would have been able to do so on your tax return if you had paid it. Also, do not include canceled debts in your income to the extent you were insolvent immediately before the cancellation of the debt. If you exclude a canceled debt from your income, file Form 982"
@pizzadude wrote:
I am not a tax expert or CPA but IMO the ability of a CA to issue you a 1099 is questionable ~ this should come from the OC who actually owns the debt....unless the CA bought the debt for $756 from Chase ( which I doubt .)......
Yes, the CA bought the debt for $1,892 - I remember I set up a payment plan of 90 days in the amount of $283.38 for December '10, $426.19 for January '11, and $426.19 for February '11 to satisfy the collection, so now they want me to pay taxes on the $756.54?! ugh... 
@2NE1 wrote:
@pizzadude wrote:
I am not a tax expert or CPA but IMO the ability of a CA to issue you a 1099 is questionable ~ this should come from the OC who actually owns the debt....unless the CA bought the debt for $756 from Chase ( which I doubt .)......
Yes, the CA bought the debt for $1,892 - I remember I set up a payment plan of 90 days in the amount of $283.38 for December '10, $426.19 for January '11, and $426.19 for February '11 to satisfy the collection, so now they want me to pay taxes on the $756.54?! ugh...
Unfortunately it is not only possible for a CA to do this, it is required by law.
An OC or CA that ceases collection and doesn't sell the debt to another CA or settles a debt such as this is required by the IRS to submit a 1099-C if the difference is over $600. This can be verified by checking the IRS web site and searching under 1099-C. This is one of the motivating factors for CAs to sell the debt year after year creating "Zombie debts" that are beyond reporting or SOL limits. CAs hate filing 1099-Cs when they can't collect anything so they just sell it to another CA for zip. The IRS 1099-C must be filed whenver the debt is abandoned (or if a CA ceases to actively try to collect) even if it's 10 years after DOFD.
It's weird but it's the law.
As noted above, there is an insolvency defense but it must be filed with the IRS. It often succeeds.
@cashnocredit wrote:Unfortunately it is not only possible for a CA to do this, it is required by law.
An OC or CA that ceases collection and doesn't sell the debt to another CA or settles a debt such as this is required by the IRS to submit a 1099-C if the difference is over $600. This can be verified by checking the IRS web site and searching under 1099-C. This is one of the motivating factors for CAs to sell the debt year after year creating "Zombie debts" that are beyond reporting or SOL limits. CAs hate filing 1099-Cs when they can't collect anything so they just sell it to another CA for zip. The IRS 1099-C must be filed whenver the debt is abandoned (or if a CA ceases to actively try to collect) even if it's 10 years after DOFD.
It's weird but it's the law.
As noted above, there is an insolvency defense but it must be filed with the IRS. It often succeeds.
Okay, so you're saying the good thing is that I won't ever be seeing this debt pop-up on my CRs years from now because they filed the 1099-C form? 
@2NE1 wrote:Okay, so you're saying the good thing is that I won't ever be seeing this debt pop-up on my CRs years from now because they filed the 1099-C form?
That's the good news since they deleted it it is extremely unlikely to pop up again. At least there is some good news.
