thejohn-texas Posted August 8, 2008 Report Share Posted August 8, 2008 I recieved a few calls over the past few weeks stating I had a important legal matter, my credit report has 0 negative entries and all three scores are in the 760's.I fell to temptation and recieved a long song and dance about prelitigation and how they are preparing to submit this debt to the IRS as income and I will be taxed, she acknowledged that it is past the SOL and cannot be reported to the C.A. but it can be submitted to the IRS as income.It was an ancient Discover account to the tune of 12,000 dollars, its more interest than actual debt, I thought I had seen the last of it a LONG time ago...........Is this a new "B.S." tactic? this is a first time on me..............NEW INFO:the debt is as I said about $12,000, mostly interest, The CA (JDB) offered a 10% final offer a little over 1100.00.Now if this goes to the IRS, do I get charged the full amount with interest or just the original debt ??? And if I settle they offered to report it as a good pay, but as I said above, its out of SOL and don't even show up anymore...............any advise welcomed, have fought to long to see my score go to crapP.S. When your wife has a 14 pound tumor, and your company changes contracts, your caught in the middle with no insurance (now its a pre-existing condition) what else do you use a credit card for? some doctors are great, and some like most hospital corparations, and insurance companies are, no cash, no treatment, anyway thats where the debt came from, not just frivolous spending............. Link to comment Share on other sites More sharing options...
borgman72000 Posted August 8, 2008 Report Share Posted August 8, 2008 You'll want to read this thread. It will clear some things up for you.http://debt-consolidation-credit-repair-service.com/forums/showthread.php?t=288260Supposedly, from my understanding, they can only report principal, no interest or other fees, which no JDB in the world will have that info, so.... welcome to the new age of things. Link to comment Share on other sites More sharing options...
Robert Nashville/Savannah Posted August 9, 2008 Report Share Posted August 9, 2008 Yes..not only can they issue a 1099 for this, it is an IRS requirement that thay do so...this is a LARGE can of worms that consumers, the IRS and the courts will be figuring out for many years to come.The concept, however, is perfectly sound...a borrower doesn't have to pay income taxes upon the receipt of a loan under the assumption that the loan must be and will be repaid (rendering the transaction, over time, a wash). But, if you receive a loan and never pay it back, then you have been enriched (received income) just as if someone simply walked up and handed you money...that is a taxable event. Link to comment Share on other sites More sharing options...
Fizzle1979 Posted August 9, 2008 Report Share Posted August 9, 2008 Someone educate me please...if the JDB issues a 1099C. Can they then sale the debt to someone else? Or once the 1099C has been issued, the debt is considered resolved? Link to comment Share on other sites More sharing options...
Robert Nashville/Savannah Posted August 9, 2008 Report Share Posted August 9, 2008 Someone educate me please...if the JDB issues a 1099C. Can they then sale the debt to someone else? Or once the 1099C has been issued, the debt is considered resolved?I'm not sure that question has been fully resolved yet but to my understanding at the moment, no, it does not mean that the paper can't be sold, and resold nor does it mean that some subsequent creditor can't eventualy collect.However, should the debt eventually be paid/settled down the road, I am fairly certian that the current creditor would be required to issue a "corrected" 1099 which, in theory, would reduce your income for that tax year just as the original 1099 increased your income in the tax year it was issued in. Link to comment Share on other sites More sharing options...
NASCAR_Devil Posted August 10, 2008 Report Share Posted August 10, 2008 I recieved a few calls over the past few weeks stating I had a important legal matter, my credit report has 0 negative entries and all three scores are in the 760's.I fell to temptation and recieved a long song and dance about prelitigation and how they are preparing to submit this debt to the IRS as income and I will be taxed, she acknowledged that it is past the SOL and cannot be reported to the C.A. but it can be submitted to the IRS as income.It was an ancient Discover account to the tune of 12,000 dollars, its more interest than actual debt, I thought I had seen the last of it a LONG time ago...........Is this a new "B.S." tactic? this is a first time on me..............NEW INFO:the debt is as I said about $12,000, mostly interest, The CA (JDB) offered a 10% final offer a little over 1100.00.Now if this goes to the IRS, do I get charged the full amount with interest or just the original debt ??? And if I settle they offered to report it as a good pay, but as I said above, its out of SOL and don't even show up anymore...............any advise welcomed, have fought to long to see my score go to crapP.S. When your wife has a 14 pound tumor, and your company changes contracts, your caught in the middle with no insurance (now its a pre-existing condition) what else do you use a credit card for? some doctors are great, and some like most hospital corparations, and insurance companies are, no cash, no treatment, anyway thats where the debt came from, not just frivolous spending.............Was the name of this company RSI by any chance? Did you Google the number? Seeing lots of activity on the web in Texas regarding these Buffalo scumbags collecting on OOS Providian/Discover Accts. Was the phone number 678.916.5966? Link to comment Share on other sites More sharing options...
momof5 Posted August 10, 2008 Report Share Posted August 10, 2008 My brother got one of those calls! (Old discover as well!) He knows enough and told the rep that is was SOL. She mentioned 1099C...blah blah.....So here would be my legalistic question on the 1099C...He is 'loaned' money by Discover. Say $4000. Discover sells it to JDB $40. JDB is only out $40 so isn't that the 1099C he should get? Think about it this way....the submit a 1099C to the Government so that THEY (creditor) get a tax break on thier income for the year. If JDB sends a 1099C for $4K on a debt they only paid $40 for, they would be defrauding ol Unc Sam, right?One thing that totally torqued this lady off. She was dumb and told my brother that they WOULD get paid through the 1099C. He laughed at her and told her that the IRS is the one that gets money from a 1099C not them!Not to mention that the additional tax he would pay is a pittance in comparison. So he tells her....go ahead and send it! Link to comment Share on other sites More sharing options...
willingtocope Posted August 10, 2008 Report Share Posted August 10, 2008 He is 'loaned' money by Discover. Say $4000. Discover sells it to JDB $40. JDB is only out $40 so isn't that the 1099C he should get?No, it doesn't work that way. The 1099c should reflect the amount of the original money "loaned" by the OC. It has a separate box for "penalty and interest" included in that amount. Of course, the JDB probably doesn't have that breakdown, so they'll just throw the entire "current balance" into the main box. There's lots of run for lawyers to argue over all this, but, since its the IRS, they'll say "pay us the tax on the money first, and then we'll sort it out later". Link to comment Share on other sites More sharing options...
debtorshusband Posted August 10, 2008 Report Share Posted August 10, 2008 He is 'loaned' money by Discover. Say $4000. Discover sells it to JDB $40. JDB is only out $40 so isn't that the 1099C he should get?No.Think about it this way....the submit a 1099C to the Government so that THEY (creditor) get a tax break on thier income for the year.No, that's not why. They are required to file so the Government gets money. The amount on the 1099C doesn't have any relation to the amount the JDB may claim as a loss.If JDB sends a 1099C for $4K on a debt they only paid $40 for, they would be defrauding ol Unc Sam, right?Again, no. Uncle Sam is looking for money from the debtor here, not the JDB.This is about the IRS getting paid taxes on the amount the debtor received and didn't pay, thus making it income.Now, whether or not the JDB can file a correct 1099C, which shows the correct amount "loaned" vs added interest and fees is another matter entirely.DH Link to comment Share on other sites More sharing options...
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