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IRS LETTER REAL OR FAKE?

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IRS LETTER REAL OR FAKE?

Received IRS letter stating I owe $3000 plus interest on my 2016 taxes, they say I did not show correct income, that a bank sent them a 1099 showing a large unpaid debt. And they cancelled the debt. The info looks real on a possible account from 2012 that had C/O and closed. But I never got anything from the bank. Is this real or attempt by a collection company trying to reage a debt.
Message 1 of 11
10 REPLIES 10
Valued Contributor

Re: IRS LETTER REAL OR FAKE?

I know some uncollected bad debt can be reported by the lender on a 1099 form, and the uncollected amount is counted as income. I would take this letter very serious. Call the IRS to be sure, but if you defaulted on some debt, it is likely real.

TU fico08=823 08/29/19
EX fico08=813 09/12/19
EQ fico08=826 09/04/19
EX fico09=815 09/04/19
EQ fico bankcard08=852 08/27/19
Message 2 of 11
Valued Contributor

Re: IRS LETTER REAL OR FAKE?


@Greyghost1 wrote:
Received IRS letter stating I owe $3000 plus interest on my 2016 taxes, they say I did not show correct income, that a bank sent them a 1099 showing a large unpaid debt. And they cancelled the debt. The info looks real on a possible account from 2012 that had C/O and closed. But I never got anything from the bank. Is this real or attempt by a collection company trying to reage a debt.

When creditors cancel debts, they are required to report the canceled amount (if it's over $600) to the IRS using Form 1099-C cancellation of debt. The IRS considers any canceled debt as income, and you're to report the income on your tax return for that year.May 9, 2018

 

This was cut and paste from a google search.

TU fico08=823 08/29/19
EX fico08=813 09/12/19
EQ fico08=826 09/04/19
EX fico09=815 09/04/19
EQ fico bankcard08=852 08/27/19
Message 3 of 11
Member

Re: IRS LETTER REAL OR FAKE?

Thanks, If I pay the IRS does that restart the debt or will it be shown as satisfied with the bank and the delete it from my credit report?
Message 4 of 11
Valued Contributor

Re: IRS LETTER REAL OR FAKE?

Also...IRS scams are usually done by e-mail or phone. If the address on this form and where they expect you to send payment is a legitimate IRS address...it is real. On the bright side, you do not have to pay the cancelled debt. I suspect the debt was cancelled because it was near or past the SOL, so the creditor knew they could not bring suit to collect. You should have also recieved the 1099c form. This tax bill will likely have to be paid. For future reference, if this same debt had been discharged in a chapter 7 bankruptcy, the discharged debt would not be taxable. It is yet another reason to declare ch7 instead of just ignoring the debt which could result in judgements, collections, and as you just found out cancellation which results in the debt becoming income.

TU fico08=823 08/29/19
EX fico08=813 09/12/19
EQ fico08=826 09/04/19
EX fico09=815 09/04/19
EQ fico bankcard08=852 08/27/19
Message 5 of 11
Valued Contributor

Re: IRS LETTER REAL OR FAKE?


@Greyghost1 wrote:
Thanks, If I pay the IRS does that restart the debt or will it be shown as satisfied with the bank and the delete it from my credit report?

Once the debt is cancelled the lender can not collect on it, it might still show on the credit report though. You no longer need worry about them suing you though...they cancelled the debt, you no longer owe it. It is somewhat unusual that they cancelled it all. Often the 1099c comes in to play when the lender accepts a lesser portion of a debt to settle, and then cancel the unpaid portion which then results in the cancelled portion becoming taxable income.

https://www.thebalance.com/why-was-my-charge-off-sent-to-the-irs-961086

TU fico08=823 08/29/19
EX fico08=813 09/12/19
EQ fico08=826 09/04/19
EX fico09=815 09/04/19
EQ fico bankcard08=852 08/27/19
Message 6 of 11
Member

Re: IRS LETTER REAL OR FAKE?

Thanks again for the reply's. I was worried as I never received a 1099c and HE BLOCK does my taxes and we went back and checked my 2016 taxes and no 1099. But in the IRS letter it shows the bank info, and account in ref. Also 1099c issued on 12/16/16
Message 7 of 11
Valued Contributor

Re: IRS LETTER REAL OR FAKE?


@Greyghost1 wrote:
Thanks again for the reply's. I was worried as I never received a 1099c and HE BLOCK does my taxes and we went back and checked my 2016 taxes and no 1099. But in the IRS letter it shows the bank info, and account in ref. Also 1099c issued on 12/16/16

May have gotten lost in the mail...read the link in my previous post. Good luck with the IRS.

TU fico08=823 08/29/19
EX fico08=813 09/12/19
EQ fico08=826 09/04/19
EX fico09=815 09/04/19
EQ fico bankcard08=852 08/27/19
Message 8 of 11
Member

Re: IRS LETTER REAL OR FAKE?

Thanks again, you've been a big help and I printed the link you sent.👍
Message 9 of 11
Valued Contributor

Re: IRS LETTER REAL OR FAKE?

https://www.irs.gov/taxtopics/tc431

TU fico08=823 08/29/19
EX fico08=813 09/12/19
EQ fico08=826 09/04/19
EX fico09=815 09/04/19
EQ fico bankcard08=852 08/27/19
Message 10 of 11
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