1099-C on Expired/Unsettled Debt; Possible Wrong Date

[NavyWife910]

Hello Everyone,

Forgive me if this question has been answered elsewhere; I have searched the threads but could not find anything similar to my situation.

I recently received a 1099-C for a stale debt. It was sent to my former address, and my taxes have already been filed.  It was sent by the OC (Discover), and states the amount of cancelled debt ($7,000) plus interest ($1,000) [figures are ballpark, the 1099 is at home and I am at work].  The Identifiable Event Code is  H — Expiration of nonpayment testing period. The Date of Identifiable Event was December 31, 2013.

I never settled with Discover on this account, nor did I file for Bankruptcy.  The last payment on the account was made in 2005.  I have received no communication from them (Written or otherwise) regarding this account since perhaps sometime in 2006 (certainly no later). They never threatened legal action, nor did they try to pursue a judgment.  The account came off my credit report in September, 2012.  In March, 2013 I applied for (and was given) the It Card with a $1,500 line of credit.   

My question is regarding the Date of Identifiable Event.  If I understand correctly, this is the date they 'signed off' or forgave the debt (please correct me if I am wrong).  Wouldn't this mean that, to Discover, this default account was still open on their books during 2013?  And if that is the case, why would they grant me a new line of credit if I had a current account in default?  As an example, I had an account with Macy's that went into default/collections (somewhere around $300) during the same time-frame.  Last summer I applied for a new account and received a letter stating they could not give me a new account as I was "currently in serious delinquency with their institution."  

What I'm getting at is, I believe Discover closed this account sooner than they are claiming (2012, not 2013). Is this worth trying to fight?

Any/all advice is welcome.

Thank you.

[gdale6]

1099-C has to be issued at an identifiable event, this one may be invalid, I would consult your tax adviser on the process for revoking it.

[NavyWife910]

thanks, gdale.

The other thing I forgot to point out is, the form it came on.  it was a typical 'tear off the ends" tri-fold , but when it got to me, not only were the three ends torn off, the back page was missing.  Also, it does not look like an official IRS document (like a W-2, with the numbered boxes, form number and QMB in the corner).  The information is just typed in a list.  This also leads me to question the validity.  

[guiness56]

This is what Code H means.

It is listed as an identifiable event.

This event occurs when the creditor has not received a payment on the debt during the testing period. The testing period is a 36-month period ending on December 31, plus any time when the creditor was precluded from collection activity by a stay in bankruptcy or similar bar under state or local law.

[NavyWife910]

I understand what Code H means.  My question/comment/concern is, I believe they issued the 1099-C in the wrong year.  

[guiness56]

Ahh.

So you are saying the 36 months should have ended last Dec 12?

After reading your post again, they are not saying they closed the account in 2012 or 2013. 

They are saying you had not made a payment on the account for 3 years prior to Dec 2013. 

If your last payment was in 2005 the 1099 should have been sent in 2008.

I would consult a tax attorney.

[NavyWife910]

Thanks, guinesss.

Yes, that is what I was saying.  Their 36-month period is much later than any payment or attempted collection activity ceased or took place...they were not prevented due to bankruptcy or any other "bar under law." 

I will consult a tax attorney. I was just curious to know if anyone else agreed with my doubts on this one.  Thanks everyone for your time

[DaBears]

+1, I would consult with a tax attorney on this one. Way past to issue a 1099-C. 

DaBears