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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28084
Experience:  Taxes, Immigration, Labor Relations
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I never received a 1099-C but just received a letter from IRS about amending taxes and owe

Customer Question

I never received a 1099-C but just received a letter from IRS about amending taxes and owe 981.$ but what I have researched and found the company did a judgement renewal in 6/2013 not a cancellation of debt in 2/2013 as stated by the IRS letter. Also the original amount was $1300., the renewal was for 3087$ as stated by IRS
Submitted: 1 year ago.
Category: Tax
Expert:  Lev replied 1 year ago.
Hi and welcome to our site!The issue is likely that form 1099C was issued and sent to the IRS...You might missed it or the sender might have your old address...I would suggest to order your tax account transcript and verify what exactly were reported.http://www.irs.gov/Individuals/Get-Transcript.See following IRS statement http://www.irs.gov/taxtopics/tc431.htmlIn general, if your debt is canceled, forgiven, or discharged you will receive a Form 1099-C (PDF), Cancellation of Debt, and must include the canceled amount in gross income unless you meet an exclusion or exception. If you receive a Form 1099-C but the creditor is continuing to try to collect the debt, the creditor may not have canceled the debt. You should verify with the creditor your specific situation; you might not have cancellation of debt or taxable income. .So if that is your situation - and the debt is NOT canceled - you would need to reply to the IRS that you disagree with their assessments - and provide your reasoning.
Customer: replied 1 year ago.

I did research the debt and it says renewal of judgement dated 6/2013 not a cancellation of debt dated 2/2013. The creditor was one that has purchased the debt from them.

Expert:  Lev replied 1 year ago.
Thus - you woudl need to reply to the IRS assessment letter with explanation of facts.
Attach a document that states - that was a "renewal of judgement" - and not a "cancellation of debt"
You may also reference to the IRS topic 431
http://www.irs.gov/taxtopics/tc431.html
which states - if the creditor is continuing to try to collect the debt, the creditor may not have canceled the debt.
That should resolve the issue.