When does the 1099C arrive

Is there a definitive date that a company must send you a 1099C for credit card debts that were settled in 2011?

I know for most other tax forms its Jan 31st, but I cannot find this info for the 1099C.

Would hate to have to file an amended return if they come after I file.

Have you thought about calling the creditor and asking them???

Why would I do that? No, I see no reason to ask them when they plan on providing me a statement on income that I will be taxed on.

Like I said earlier, I was looking to see if there was a date in general that they go by, like w2's is Jan 31, etc. If I get them after I file I will file an amended return, but I will not include 1099c's that I don't receive.

Thanks anyway.

According to the IRS, all 1099 forms must be mailed by 1/31 unless it falls on a weekend or holiday.

Also, remember you are required to report all income, including forgiven debt, Whether or not you receive a 1099. They hold you responsible for failure to do so. Especially if you have no tax consequence due to insolvecy, it is very important to declare it even if no 1099 is received.

Suggest you verify this with a tax expert, as I did.

dtm

Okay, here's the problem with 1099's - and believe me this has created a problem or two for my clients.

Creditors are required to get these forms mailed by 1-31 for the forms they choose to mail that particular tax year. Why do I say "choose"? Because unfortunately, creditors actually are given three years before they are required to send out 1099's. Yes, I know this for a fact, and I'm not lying.

Here's the problem that can arise from this. We used to tell our clients to claim their canceled debt as income, even if they didn't receive a 1099 from that particular creditor - just to cover themselves - in case. Well, it turns out that some of these same clients had to go back and revise their tax returns for previous years due to the fact that the creditor chose to send the 1099 a year or two later, at which time our clients didn't feel that they had to claim the canceled debt, because they already had in previous years. So, this in itself creates a problem when the IRS contacts you and lets you know that you filed a false return, and didn't claim this income. You actually did, but you did it for the tax year you actually settled your debt, not for the tax year that the creditor decided they'd like to file the 1099C with the government.

My advice is to call each creditor from whom you did not receive a 1099 and be sure that they are indeed filing this with the IRS for the tax year 2011. If they are not, don't worry about it - claim the canceled debt when the creditor chooses to file the 1099 with the IRS. But, it's up to you to keep track, as you don't want to face issues with the IRS later on.

I know this sounds confusing, but hopefully this information helps those of you who are wondering about the 1099's you can or cannot expect to receive.

There is only one correct answer to this. The IRS REQUIRES taxpayers to report forgiven debt in the tax return filed for the year in which it was forgiven.

Should you choose not to do so AND regardless of whether or not you received a 1099 then you are subject to the interest, penalties and back taxes due.

If one receives a 1099 in a later year that was correctly reported in the year it was forgiven, a simple explanation to the IRS as to why the income is being excluded on the later return should be sufficient.

Thanks SL, Marie, and Dan.

Ive only recieved one out of three for last years settlements.

I will call the other two to see if they are reporting for 2011 or a later year.

As Dan and Marie have said the IRS requires you to include that info even if no 1099C is received, probably easier to do as Dan suggested and avoid a penalty and interest.

Thanks again

I understand Dan's argument, but if I'm insolvent and not going to owe any tax of the forgiven amount, isn't it going to just make more tax preparer bills for me to include it now and then have to amend the return later? I don't think the IRS can charge interest if you don't owe any money. Not sure about penalties, but I think that too is computed based on the money owed. I'd be inclined to wait for the tardy 1099-C and file it along with the insolvency support whenever the company actually reports it to the IRS.

Also, I've read that if the 1099-C forms don't add up to the number on Form 982, it will trigger an audit. Anyone know if this is true?