Have a Tax Question? Ask a Tax Expert
Hello and thanks for trusting me to help you today. I am a tax adviser with over 15 years of experience.The IRS unfortunately added this cancelled debt to your 2011 income because it was reported in 2011 as cancelled. If you received a Form 1099-C but the creditor is continuing to try to collect the debt, then the debt has not been cancelled and you do not have taxable cancellation of debt income.
There are certain debts that are cancelled and are excluded form income:Canceled Debt that Qualifies for EXCLUSION from Gross Income:
If your debt was one of the above then that would be your reason to show to change the taxable amount.
The debtors may be still trying to collect. I am not sure I need to check because I get many calls since I never did the BK yet.
I am not sure it it would qualify as one of those.
It was a credit card.
Yes check on that and then you will know how to respond to the IRS. Do not delay as there time limits to respond.
Credit card debt would be allowed for exclusion if you were insolvent.
I was away and missed the date to respond. Now they are just asking for me to pay it. Is it too late?
The IRS issues the notices and has the response times allowed because those are set by law and what the taxpayer and IRS must adhere to.
Should I try anyway? I was insolvent. Could you tell me the best way to express that to them?
Yes, if you were insolvent and can show just cause of your response delay then I would say you should try. Of course if the IRS does not agree then you are incurring interest on the amount till paid.
Simply tell the reason why you were not able to respond timely.
You will want to prepare Form 982
that will be the form to use to show that you were insolvent.
Do I find that form on their site?
I can give you link, one sec..............
Thank you very much and do you recommend a good reason for why I was late because even when I did see it I waited cause I was not sure how to fight it and did not have money to pay it then started with justanswer!
Then that would be your reason to tell the IRS.
You should simply explain your inexperience an dthe need to find assistance that you could afford.
Ok Great! Thanks so much. You were very helpful...wish knew about here sooner lol Have a great day!
You are most welcome
HI, I have been busy and just now got to filling the form out. The form 982 seems to be if it was discharged. Just confusing. Any quick advice on how to fill it out. Thanks so much
So in part @ pretty much I write the amount they are saying I owe?
Thank you. I appreciate it!
Sorry finishing it up finally to mail it out, but I am confused cause in part 3 in mentions a corporation. This was for my personal taxes. Also which box would I write the amount I was insolvent whether or not it be with no assets or with assets?