Pra 1099-c

I need some good advice - PRA has been routinely calling for about a year and a half. Late last year, the calls came multiple times a day. Every time I actually spoke with them I asked for verification of debt. I sent them several certified letters requesting VOD as well. I'm not sure I owe the money - I had an acct with Chevy Chase in 1993, but our identity was stolen in 1996, and most of our accounts were closed at that time. As you can guess, the information provided for verification was useless, and only went back a few years. I finally wrote them a letter stating that I did not acknowledge the debt, and do not contact me again. To my amazement, they went away. However, on friday I got a 1099-C for roughly 13K. I live in Texas. I contacted an attorney yesterday, who didn't have any answers. What should I do?

I think yours is typically a question for tax professional. But you can still benefit from the following discussion.

http://www.debtconsolidationcare.com...s/jdb-irs.html

Molly, I agree with SC. Your best bet is to ask the question to a tax professional.

However, my guess is that the collection agency has regarded this debt as uncollectible and therefore has issued the 1099 c form. But the form shouldn't be issued anytime late than when the debt was written off. Do you have any idea when the debt has been written off? You can also dispute the 1099 c if you don't consider it justified. Check with the IRS website for more information in this regard.

Anyway, you must wait to hear what others, especially Uncle has to say about it.

Mornin' Molly -

To start with, let me say that I'm not an accountant or a tax attorney. Now then...

Do I correctly understand these facts?

- The debt is from 1993.
- No proper validation has ever been provided.

Assuming that my understanding of the facts is correct, you really need to lay this out for a tax pro, or for the IRS directly. It sounds to me like PRA is using the 1099-C abusively, as a means of sidestepping their responsibilities under the FDCPA. I do not believe that they should be able to hang a 1099-C on you if they cannot validate the debt.

The IRS has several local offices scattered around Texas. Your very best bet is to contact them with your problem. They can get you the assistance you need. They can also help PRA get the hard kick in the teeth that they need, if they're abusing consumers with fraudulent 1099-Cs.

If you don't find resolution from your local IRS office, you may need to dig deeper. You have two general options here. The IRS operates the Taxpayer Advocate Service, which exists to help folks resolve problems that normal IRS channels haven't been able to fix. Or you could spend a few dollars for half an hour of quality time with a good tax attorney. It's still likely to be cheaper than paying taxes on an additional $13k of 'income' that you never saw.

Whichever route you decide to go, please keep us posted. We're learning, too.

I am consider debt settlement. How can you be taxed on the forgiven amount and why? How much tax would I be liable for on say 15000.00?