Re: 1099-C issues and charge off,Please help!![ Edited ]
08-03-2012 06:42 AM - edited 08-03-2012 06:43 AM
There are probably several ways to do this.
Your first option would be to take all of your tax return information and your 1099 to a professional tax person. While you're at it, take documentation on all your debts at that time (loans, collections, credit cards, EVERYTHING). You can try to file an amended return. If you were insolvent (had more debt than assets at the time the debt was forgiven), you probably won't owe anything. This would be my first choice.
You could also wait for the IRS to audit you. I claimed insolvency when my debt was settled and the unpaid amount was forgiven (2010 tax return). But I didn't include the right paperwork. Earlier this year, I got an audit letter in the mail, stating that I owed something like $800 (I had a couple thousand in forgiven debt). All I needed to do was fill out the insolvency worksheet, and the audit was disolved. Just to put it in perspective, I made about $20k that year, and I got audited (unemployment, waitressing, bartending. It was a bad year). They can audit up to 3 years back.
If the 1099C was given to you in Jan 2011, you should have filed that with your 2011 return this year. There's probably still plenty of time to get an amended return filed.
Best of luck!!!
2011 - Debts paid, no open credit
2012 - Rebuilding started, secured cards opened, SL rehabbed - EQ myFICO 636
2014 - 10k Discover, 3.5k Freedom, AmEx Green, SL, Auto Loan - EQ myFICO 695