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Jax Tax
Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1408
Experience:  JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
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I received a 1099c today from portfolio recovery regarding

Customer Question

I received a 1099c today from portfolio recovery regarding a debt that was charged off in 1999. What do I do?
Submitted: 5 years ago.
Category: Tax
Expert:  Jax Tax replied 5 years ago.
It mist be included on your taxes. If you have filed, you mist amend them. It is only a matter.of time.until the Irs adds it for.you. They will charge additional penalties if they do it and not inquire as to whether.you qualify for any exception. Get a.professional.and inquire about form 982 exceptions especially insolvency meaning your debt exceeded your assets immediately prior to the discharge.
It is other wise taxable.unless it was a.result.of bankruptcy or foreclosure.or modification of a loan against your primary residence.
Expert:  Anne replied 5 years ago.
Hi

Thank you for using justanswer. Section 6502(a)(1) of the tax code limits the time IRS can collect or levy tax to 10 years after the date of assessment . (See also Tax Code section(NNN) NNN-NNNN1) Court proceedings must also be started the the IRS within that 10 year Statute of limitations.


The statute of limitations for the state of Maine (if that's the state that would have been involved back in 1999) audits is 3 years from the later of the due date or the file date of the tax return. If income understated by more than 50%, statute of limitations is 6 years.

In both cases it appears that the statute of limitations has passed, and you have every right to dispute this 1099C.

You need to send a letter to the issuer of the 1099C via Certified Mail + Return Receipt (NOT regular mail) stating:

Per the Fair Debt Collection Practices Act, I dispute your claim that I entered into any settlement agreement that involves a forgiveness of debt that would necessitate my filing a 1099-C. I will not file any 1099-C form until you provide written documentation that I entered into any such agreement, to include:
- a copy of a written agreement with my signature where I agreed to settle with your firm that involves a forgiveness of debt that would require my filing a 1099-C
- a copy of the canceled check for any alleged payment by me

Per the Fair Debt Collection Practices Act, I am requesting written validation of this alleged debt, including a copy of the original signed application with my signature
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* Do not sign your signature on any document that you mail to a debt collector. It could end up on a forged document that can be used against you. Simply type your full name.

If you get any notice from the IRS regarding this 1099C, send a letter to them stating that you did not enter into any settlement agreement that involves a forgiveness of debt and that a 1099-C will not be filed until proof is provided about any alleged settlement.

I hope this helps.




Expert:  Jax Tax replied 5 years ago.
The 10 year statute of limitations starts from the assessment date. If the 1099c was not included on the return, the time has not began. Also, the 1099 was just issued. It is up to the creditor to determine when to write of a balance. I am assuming the 1099 is forXXXXXsince it was just received.If the 1099 is on a 2010 form, you do need to amend the return or include it if not filed and look at the 982 exceptions.
Jax Tax, Tax Attorney
Category: Tax
Satisfied Customers: 1408
Experience: JD, LL.M in Business and Taxation, IRS Enrolled Agent. Expert in Business and Tax Transactions
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