1099C phone call

[Anonymous]

This morning I received a phone call from CRA.  The girl introduced herself as the "presidents secy" and that they were getting ready to issue a 1099C.  I wasn't familiar with the 1099C and asked about it, thinking it had something to do with a regular 1099 (which I've been independently employed for years and was familiar with).  She seemed confused and couldn't really explain what a 1099C was.  So, I told her that my husband is a CPA (true) and my brother is an Atty (true) and I would want to talk to them.  She put me on hold and a Mr.  Gallagher (sure!) got on the phone and ask would I like to settle my debt with Discover.  Well, my Discover card DOLA was 2001 so I told him so and he said... I'm not looking for money on that debt, but you can settle with me before I turn you over to the IRS.  One thing led to another and he started shouting.... "I pay my bills, why don't you?"  I kept saying I want to discuss with my family.  He got really "ticked" and hung up on me.   Truth be told, I don't want my brother to know (embarrassing) and my hubby for that matter (this was prior to our marriage).  Hoping for a little insight on the 1099C thing and how that works.  I live in Florida, if that matters.

[Anonymous]

A 1099C is for forgiven debt.  When a debt is forgiven it is considered income on your part and they tell the IRS.

Since it is past SOL and they can not sure you and win this is what they do.

So, if the balance was $6000 and they forgave $6000 then your income will increase by that amount for the year the 1099C is issued.

[Anonymous]

It was the collection agency that called.  If they purchased the debt (which was around $5000) for pennies on the dollar, does that matter?  Do these scums have a certain time frame in which to issue a 1099 C on a "forgiven debt"? 

Also, I thought it had to be the original creditor who filed a 1099 C. 

Honestly, I would rather pay the irs than the scum bucket on the phone.  

[Anonymous]

A CA can also issue a 1099C if they bought the debt. Unfortunately, no there is no time limit on filing one.  A lot of times they will wait for the SOL to expire then file.

The amount they purchased it for does not matter either. 

[Anonymous]

You should go to the IRS website and educate yourself if you receive the 1099c.  There are circumstances in which you would not be liable for taxes; also, if you never affirmed the amount of the debt, then you may be able to dispute it in whole or in part.