Rant.... Case law anyone?

[Chancy949]

Ok here is my Rant...

Is there a law that says its ok for a firm to collect on a debt that is paid? I know some of you heard me rant about this in the chat room. If a firm charges off a debt then sells it for a cheap price, TECHNICALLY wasn't a majority of the debt paid? (by the government in the tax write off?) What law states that the company who bought the debt for penny's on the dollar has the right to collect on the FULL AMOUNT of that debt that has technically been paid by the tax payers. YES the amount that the debt is sold for is considered income and "put back on the books" but what about the other 97% that was "charged off". That amount was paid, technically. What law says that a debt can be paid twice? YES it was written as a LOSS, but its still been PAID. That means they paid less on their taxes. So it is still INCOME, a penny saved is a penny earned..

And don't say because they can and do DUHHH!

I just want to know if there is any case law out there supporting it. Just wondering if it has been argued before a judge. IF there is no law that says they CAN and no law that says the CAN'T then its in that great void that is only up to interpretation.

HMMMM.................

Sorry Judge this debt has been paid.....

JDB "what do you mean??? I have it right here!!"

Your honor, The JDB has paid 3% for this original debt. the rest was written of on the OC taxes as a loss. Why should I pay this JDB for a debt that has already been paid by the federal government. I can see giving him the 10 bucks he paid for the debt, but beyond that...."

Has anyone argued this???

I'm looking for case law....... Anyone?

Maybe the OC can only write off a smaller percent say 20%, still, what JDB go after is the full amount with interest and fees........makes me go HMMMM maybe I think to much................

[DocDon]

I found this definition of a charge off:

Accounts receivable that will likely remain uncollectable and will be written off. Charge offs appear as an expense on the company's income statement, thus reducing net income. In general, companies make an estimate of charge off expenses that might be incurred in the current time period based on past records as part of the process of estimating earnings. Most companies make a charge off allowance since it is unlikely that all of their creditors will pay them in full. also called bad debt

The "in general" [and remaining] part of that definition seems to imply that their tax is already figured out using the "projected" losses. Therefore, they're not really gaining anything from it for tax purposes (unless the losses extend beyond their calculated charge off allowance).

It would be interesting to see the exact verbage in the tax code dummed down in plain English and I agree, any court cases that challenged the JDB's role in this.

[Chancy949]

GOOD point about the tax law. I think I can find the anwer. One of the ladies we share office space with is a Tax accountant for small businesses. SHE'LL know!

[Onfire]

Ya know, I was thinking about that just the other day and was gonna post a ? bout it but she beat me to it.

[DocDon]

She's been festering about this for days.... glad to see she finally got it off her chest..

[Chancy949]

She's been festering about this for days.... glad to see she finally got it off her chest..

I'm happy to know you looking out for my happiness 8)