Re: I need to know about settling on a account and the IRS

Posted by LadynRed (199.91.33.254) on February 07, 2003 at 16:42:19:

In Reply to: Re: I need to know about settling on a account and the IRS posted by Jen on February 07, 2003 at 14:19:45:

Ok. If you have a debt for $1500 and you settle for $500, then the 'forgiven' amount is $1000 and would go on a 1099-C. It would be added on Line 21 (I think) of your tax return as part of your income.

If you don't get a 1099-C, they can and will most likely sell the remainder of $1000 to a collection agency who will come calling some time down the road. You cannot stop them from doing this if you don't get a 1099-C. That would be restraint of trade (per WhyChat) and you can't do that.

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