Re: Debtor penalized by IRS for charged off accounts(form 1099)
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Posted by Drew
(24.59.27.46) on January 30, 2004 at 23:07:04:
In Reply to: Debtor penalized by IRS for charged off accounts(form 1099) posted by Tia on January 30, 2004 at 21:58:53:
Tia, they lied to you. First of all, all credit card companies are required to charge off delinquent accounts about 180 days. They report this as a loss to the IRS. The only way that you will have to do a form 1099C is if the ORIGINAL CREDITOR is willing TO FORGIVE the debt and ZERO your account out in its entirety. Normally, they charge the account off, keep tacking on interest and either assign it to a collection agency or sell it outright to a collection agency. If they do that, there is still a debt and it is not income to you. So the next time your creditor calls and throws that garbage point blank at you, ask him/her this. So you agree and are willing to put it in writing then, that you are giving me a 1099C and that the DEBT IS FORGIVEN in its entirety? See what she says then. The rules of the IRS is that if the debt is settled, a 1099C is only given if there is a FORGIVEN amount. TO FORGIVE an AMOUNT is to formally state that YOU DON'T owe it anymore.
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