Am I required to report a paid credit card collection with the IRS?

[805orbust]

And they just hired what... 85000 new agents?  So chew on that for a moment.

[pizzadude]

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@IcyCool7227 wrote:

I just finished filing my federal tax return (didn't owe any taxes so it didn't matter if it was late). Quick question: If I settled and paid a credit card collection from last year with Portfolio Recovery Associates did that need to be be reported on the tax return? If so would that have changed any amounts owed or otherwise? I did not see anything in either Turbo Tax, H&R Block or Ca$h App prompts or help pages.

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Agree with the others, eventually the IRS will probably send you a notice of tax due.    You can wait for this or if you want to get ahead of it then use your effective tax rate to estimate the tax and submit via https://www.irs.gov/payments

[FireMedic1]

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@805orbust wrote:

And they just hired what... 85000 new agents?  So chew on that for a moment.

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Recinded.

[OmarR]

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@CreditCuriosity wrote:

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@IcyCool7227 wrote:

Well actually I found the 1099-C in my papers AFTER I filed the taxes the other day. There was so many other papers mixed in from United Healthcare that I had overlooked it. But to amend it would mean printing 15 pages of the filed return then attaching that document. Not worth the hassle. If the IRS contacts me about it then of course I will provide the document but 2022 certainly was a year for tax documents! That would be the 8th form as I already reported 7 forms. What a headache! The frustrating thing was I had to keep filing  with two different companies until I found Cash App for free as the others wanted to charge me because I took out a 401k early withdrawal.

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Hopefully they don't reach out to you as I use to contract for the IRS (writing software) and a year after I ended up getting audited for a bit different thing they don't just reach out to you and say hey you forgot this lol.  Best of luck.  Depending on how much it is I would consider an amended return as the gov't certainly likes their money

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In my two experiences (one my fault, one not), they have always sent out a LOE and given me a deadline before interest/penalties started to accrue. But if you were constantly moving, no current address on file, and not filing for several years, than I could understand them going straight for the garnishment.

Both times, I did not see it coming ahead of time, so an amended filing was not on my radar. Honestly, it was just as easy to wait for their audit, get the bill in the mail, and to just pay it.

[MeredithLepore]

Yeah, in this situation, it sounds like ammending your return may very well be worth the hassle!

[Anonymous]

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@fury1995 wrote:
1099-C income for cancelled debt is reported as income only if you receive one.

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That sounds different from all other 1099s!  From IRS Form 4861: "Even if you didn't receive a Form1099-C, you must report canceled debt
as gross income on your tax return unless one of the exceptions or exclusions described later applies. "  And various nasty stories of the "applicable entity" sending one to the IRS but not the person with cancelled debt.

It sounds more complex in this case as unlike say with a 1099-INT, where you can find out the interest, you don't necessarily know the info (e.g. CA's basis.)

[CreditCuriosity]

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@OmarR wrote:

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@CreditCuriosity wrote:

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@IcyCool7227 wrote:

Well actually I found the 1099-C in my papers AFTER I filed the taxes the other day. There was so many other papers mixed in from United Healthcare that I had overlooked it. But to amend it would mean printing 15 pages of the filed return then attaching that document. Not worth the hassle. If the IRS contacts me about it then of course I will provide the document but 2022 certainly was a year for tax documents! That would be the 8th form as I already reported 7 forms. What a headache! The frustrating thing was I had to keep filing  with two different companies until I found Cash App for free as the others wanted to charge me because I took out a 401k early withdrawal.

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Hopefully they don't reach out to you as I use to contract for the IRS (writing software) and a year after I ended up getting audited for a bit different thing they don't just reach out to you and say hey you forgot this lol.  Best of luck.  Depending on how much it is I would consider an amended return as the gov't certainly likes their money

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In my two experiences (one my fault, one not), they have always sent out a LOE and given me a deadline before interest/penalties started to accrue. But if you were constantly moving, no current address on file, and not filing for several years, than I could understand them going straight for the garnishment.

Both times, I did not see it coming ahead of time, so an amended filing was not on my radar. Honestly, it was just as easy to wait for their audit, get the bill in the mail, and to just pay it.

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Sorry just saw this yes moved about 4 times in two year period of time and address they had on file was an old one so notices were getting not noticed and hence the garnishment, but once got ahold of them they cleared it up with payroll once we figured out an agreement.