Re: Debt Cancel and IRS

Posted by Why Chat (209.240.222.130) on July 02, 2002 at 07:41:58:

In Reply to: Debt Cancel and IRS posted by Ken on July 01, 2002 at 22:11:59:

The IRS rules state very clearly that "forgiven" debts over $600. MUST be accounted for as income. HOWEVER, in practice, many OC's just "bury" the balance by turning it over to a special kind of collection agency account,(generally-in house)It is still "legally" on the books as a collection item, but is not reported to CRA's nor are any collection activities done on it. There are some law suits creeping their way through the IRS system on this subject,as OTHER balances MAY generate a 1099C,OR be turned over to a ca for COLLECTION! Which is why so many posters can't understand when a collection item they had "settled" years ago, suddenly pops up with a collection agency.

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