Starting off with a joke, I'd say that I'm glad I never got one because it would infuriate me to the point where I would want to burn it and bury the ashes in Illinois, cursing and spitting all the way about the audacity of pretending that debt forgiveness because I was too broke to pay a hospital bill that someone made up in their head somehow equated to taxable income.
Think about it this way. The two biggest parasites in most people's lives, the hospital and the IRS, decided to get together and throw you a party.
This has happened to my mother a few times.
Seriously though, just use your tax software and tell it you have a 1099-C and pay the taxes you owe. It's not that much different from a tax perspective than other simple 1099 income.
Generally, you get a 1099-C when a creditor has given up and taken a partial payment. But sometimes when they're obviously going to get nothing, they forgive the debt and issue a 1099-C on the entire thing just to spite you. The problem is, you have to report it because the IRS gets a copy of it too.
Usually, the really big ones are from hospitals where they were in there charging you $9,000 to check into the ER and $400 for an aspirin, and whatever else they feel like making up back there, and you're too poor to pay it, so they create a tax problem so the government can pretend it's the same as you getting a bunch of money and stealing from you.
But...the law's the law. This is one of those times where just ignoring the problem and hoping it goes away just isn't going to work. There's no way to hide it because the IRS gets a copy too, so if you don't declare it, you can expect a CP2000 letter where they send you a bill, and if it means you understated your income by a total of 25% or more, you're _really_ in trouble. So it's better to just pay the tax people.
