Yes they can and you don't know it happened

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Posted by Bill Bauer on April 11, 2001 at 16:42:08:

In Reply to: The IRS, canceled debts? posted by JT on April 11, 2001 at 12:29:03:

If you have a old debt over 600.00, that debt is considered income if not paid.
It can be as little as $10.00 Don't have to be no $600.00. Loan your neighbor $10.00 and if he don't pay, you can file a 1099-C forgiveness of debt form on him and he has to pay the taxes on the $10.00
You can't claim the $10 as a loss on your tax form unless you have paid the taxes on the $10.00.

A creditor can file the loss to the IRS with a 1099-C. What this means for you is that the debt you previously escaped or did not pay back will be considered as part of your earnings and is taxable.

Yep! Exactly right.

: What happens exactly?
What happens exactly? If they file a 1099-C forgiveness of debt form on you and you don't report it on your taxes, you could be liable for attempted tax evasion. That's not likely to happen, but you will probably get a notice of the difference and a demand that you refile your taxes or file an amended tax return and pay the tax due, maybe plus interest and penalties.
That's what you get for messing with the IRS in the first place. You gave up your 5th amendment rights when you signed the tax forms under penalty of perjury, You assessed yourself a tax which you never owed in the first place because you are not and never have been a taxpayer (Radinsky v U.S. 1964 10th Circuit court of appeals, Judge Richard Matsch presiding ) and you voluntarily paid in a deposit against the possibility that you might owe a tax. In all your life, you have never paid even one crying dime in taxes to the government. All you ever did was to put up deposits and after 3 years time, the government took the deposit money by default because you never claimed it back. Simple as that. In otherwords, you volunteered everything even though no law ever demanded that you do that.
So you got nothing to holler about. You takes what they gives you and you likes it, I guess.

If a creditor sells your debt to a collection agency, is it reported to the IRS as well?
It can happen. If the creditor writes off your debt, then he claims it as a tax deduction, but seldom knows enough about the tax laws to file a 1099-C forgiveness of debt on you. Businesses all use accountants and tax attorneys and I've never seen one smart enough to tell the creditor to do that yet, although I have heard of a couple of business owners smart enough to do that.
But you have more basic queations than that. So the creditor sells the debt to a collection agency. So what?? That happens very rarely and is claimed to have happened much more than it ever does. But if the collection agency comes up claiming they bought the debt, that's when the fun really begins. You can really run them around Robin Hood's barn if they were stupid enough to do that. Collection agencies are nothing to be afraid of at all. They are nothing but jackals who operate on the principle of generating as much fear as possible and extracting the maximum amount of money possible out of the debtor. Pesonally, I always have done my level best to goad them into filing a judgement or shut the h--- up and if they do that, I simply go right down to the court house and hit them with a motion for summary judgement. That's when they find out the shoe is on the other foot and it pinches really, really hard. Their attorneys are alwasy so stupid they pull dumb stunts in the courtroom and I can always find 4 or 5 errors they make in every case and then it's reverseable. Once reversed, it's time to go after them for damages, violation of civil rights, denial of due process of law and any one of several other charges I can lay on them. They start crying "Uncle" real fast. I've got one I'm going to be starting just after the 1st of August, and when I get through with them they are going to bleed big time. Anybodycan do the same. You just have to learn how to do it. Learn the law and make it work for you. And no, I'm not an attorney, but I beat "top notch" collection attorneys in court all the time.
I've actually seen those bozos crying tears on their way out the courtroom door.

Does the creditor have to notify me if they report my debt as a loss? Nope! They sure don't. How do you know if a debt has been canceled? They don't cancel it, they write it off (charged off) or they file 1099-C forgiveness of debt.Then they still come back trying to collect it. But if they charged it off, then Uncle Sam actually paid the debt, didn't he? And then they expect you to be so stupid as to pay it again??

Explain this issue to me in plain terms, please.

Is that plain enough for you? If not, let me know and I'll try to do better

Bill Bauer
http://creditwrench.hypermart.net/index.html

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: If you have a old debt over 600.00, that debt is considered income if not paid. : It can be as little as $10.00 Don't have to be no $600.00. Loan your neighbor $10.00 and if he don't pay, you can file a 1099-C forgiveness of debt form on him and he has to pay the taxes on the $10.00 : You can't claim the $10 as a loss on your tax form unless you have paid the taxes on the $10.00. : A creditor can file the loss to the IRS with a 1099-C. What this means for you is that the debt you previously escaped or did not pay back will be considered as part of your earnings and is taxable. : Yep! Exactly right. : : : What happens exactly? : What happens exactly? If they file a 1099-C forgiveness of debt form on you and you don't report it on your taxes, you could be liable for attempted tax evasion. That's not likely to happen, but you will probably get a notice of the difference and a demand that you refile your taxes or file an amended tax return and pay the tax due, maybe plus interest and penalties. : That's what you get for messing with the IRS in the first place. You gave up your 5th amendment rights when you signed the tax forms under penalty of perjury, You assessed yourself a tax which you never owed in the first place because you are not and never have been a taxpayer (Radinsky v U.S. 1964 10th Circuit court of appeals, Judge Richard Matsch presiding ) and you voluntarily paid in a deposit against the possibility that you might owe a tax. In all your life, you have never paid even one crying dime in taxes to the government. All you ever did was to put up deposits and after 3 years time, the government took the deposit money by default because you never claimed it back. Simple as that. In otherwords, you volunteered everything even though no law ever demanded that you do that. : So you got nothing to holler about. You takes what they gives you and you likes it, I guess. : If a creditor sells your debt to a collection agency, is it reported to the IRS as well? : It can happen. If the creditor writes off your debt, then he claims it as a tax deduction, but seldom knows enough about the tax laws to file a 1099-C forgiveness of debt on you. Businesses all use accountants and tax attorneys and I've never seen one smart enough to tell the creditor to do that yet, although I have heard of a couple of business owners smart enough to do that. : But you have more basic queations than that. So the creditor sells the debt to a collection agency. So what?? That happens very rarely and is claimed to have happened much more than it ever does. But if the collection agency comes up claiming they bought the debt, that's when the fun really begins. You can really run them around Robin Hood's barn if they were stupid enough to do that. Collection agencies are nothing to be afraid of at all. They are nothing but jackals who operate on the principle of generating as much fear as possible and extracting the maximum amount of money possible out of the debtor. Pesonally, I always have done my level best to goad them into filing a judgement or shut the h--- up and if they do that, I simply go right down to the court house and hit them with a motion for summary judgement. That's when they find out the shoe is on the other foot and it pinches really, really hard. Their attorneys are alwasy so stupid they pull dumb stunts in the courtroom and I can always find 4 or 5 errors they make in every case and then it's reverseable. Once reversed, it's time to go after them for damages, violation of civil rights, denial of due process of law and any one of several other charges I can lay on them. They start crying "Uncle" real fast. I've got one I'm going to be starting just after the 1st of August, and when I get through with them they are going to bleed big time. Anybodycan do the same. You just have to learn how to do it. Learn the law and make it work for you. And no, I'm not an attorney, but I beat "top notch" collection attorneys in court all the time. : I've actually seen those bozos crying tears on their way out the courtroom door. : Does the creditor have to notify me if they report my debt as a loss? Nope! They sure don't. How do you know if a debt has been canceled? They don't cancel it, they write it off (charged off) or they file 1099-C forgiveness of debt.Then they still come back trying to collect it. But if they charged it off, then Uncle Sam actually paid the debt, didn't he? And then they expect you to be so stupid as to pay it again?? : Explain this issue to me in plain terms, please. : Is that plain enough for you? If not, let me know and I'll try to do better : Bill Bauer : http://creditwrench.hypermart.net/index.html

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