Cancellation of Debt - 1099C Form - Need Advise

[Anonymous]

I too have just today received a phone call from a collection agency saying that they were sending a1099C to the IRS re a debt that was (as far as I know) written off backin 1996 ..... I had lost my job and refinanced my house to settle a couple of debts and USA Bank would not settle (I guess - dont really remember) anyway, I haven't heard from them nor a collection agency in years ...SOL for Louisiana is 6 years so I am well beyond that .  The collector advised that the total amt due now is $8,000 ..... I certainly didn't owe that much but as I said, I dont really remember what happened..... whatever records I had are long gone and I basically hung up on the collection agency .....  what should I do now.

[RobertEG]

Obligation to pay taxes on cancelled debt reported by way of a 1099c is exempt under the tax code if the taxpayer can show insolvency, meaning their debt exceeded their assets.

I would contact a tax specialist before assuming the tax obligation must be paid, particularly if a BK was discharged.  That's a pretty strong case of insolvency.

[Anonymous]

Sorry for the late post.

Good news! The IRS sent me a letter about 6 weeks later saying i did not own any money! The letter I wrote to the IRS worked.

[IOBA]

Yeah!

Did you find out what the debt was about from collection agency?

[CreditCrusader]

These scumbag OCAs are famous for these types of sleezy tactics. This is nothing more than a recalcitrant sewer server trying to damage you for a freaking bogus tax write-off. Dispute it to the end.

[Anonymous]

A 1099-C can be issued after a bankruptcy.  However, the IRS states that you are not liable for taxes on a discharged debt.  If you received a 1099-C for that purpose you would need to file an IRS form 982.

Also, a 1099-C cannot be issued on fraudlent debt.