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 Posted: Wed May 03, 2006 8:27 am |
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Hello, I have a question, please. If a collection agency issues a 1099c, will the amount of the forgiven debt be the original amount of debt, before all the late fees and interest were added? Or, will the amount listed as forgiven debt ,include fees and interest?
Example:
If the credit card balace was 3000 at the time of the last payment, and 4 years later the balance has fees and interest added, making the new balance be 5000....which dollar number is listed on the 1099c?
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RCT
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| Posted: Wed May 03, 2006 8:45 am |
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It should be on the remaining balance at the time the 1099C was issued.
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LCW
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| Posted: Wed May 03, 2006 8:50 am |
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So, the remaining balance incudes all fees and interest?
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| Posted: Wed May 03, 2006 11:45 am |
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In my opinion, the fees and interests are included in the principal amount when the 1009c was issued.
However, you can discuss this matter with your tax attorney for a better understanding.
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john
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| Posted: Wed May 03, 2006 4:45 pm |
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Somewhere, I read that the 1099c could only be for the amount the collection agency paid for the debt.
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LCW
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| Posted: Sat May 06, 2006 2:38 pm |
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I did not understand all of the above IRS information.
I am not sure a collection agency can issue a 1099c. I am not sure a 1099c can be for the balance, interest and fees.
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Anne
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| Posted: Sat May 06, 2006 3:15 pm |
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That would be because it is written by the government. any one can issue a 1099C if they are forgiving debt, ant it appears they can include interests and other fees in the amount being forgiven...Amount less than $600 apparently do not need to be reported, amounts over $600 do.
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LCW
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| Posted: Wed Apr 23, 2008 11:05 am |
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if a collection agency warns you that the irs is sending you a 1099c for collecting the taxes on the forgiven amount, but offers a settlement amount instead. is the harm is paying the taxes on the 1099c over paying the settlement offer?
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rey
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| Posted: Wed Apr 23, 2008 12:13 pm |
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If you pay a settlement and you "save" 600 dollars or more you will be issued a 1099 anyway.
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