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Reporting credit card debt to IRS?
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Posted by anon
(151.204.150.229) on February 01, 2003 at 12:14:37:
I got a call last night from my credit card company. I am behind on payments and am at 177 days past due. I know that at 180 days past due (or 6 months) they turn you over to a collection agency. Well-this man told me that not only would they turn me over to a collection agency if I didn't make a payment right then and there, but they would also report my entire credit card debt to the IRS as earned income and have a 1099 sent to me so I would have to pay taxes on it all. I have never heard of this before! I called back about an hour later to make a payment and spoke to someone else who said that yes, that was true about the IRS and that the law had been in effect for 3 years. Now, I had another credit card about 2 1/2 years ago that got sent to a collection agency who I then made a payment plan with and the card is now almost totally paid off-no mention of the IRS was ever made then. Is this all true? Oh, they said they could do this because they are a federal banking institution.
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