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Asset Acceptance sent me a 1099-MISC


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Last year I sued Asset for FDCPA violations. Today in the mail, I get a 1099-MISC, not C, for the total amount of the settlement.

I emailed the attorney I retained to file suit to ask if they can issue a 1099, but from what I read, I think they can.

Has anyone else been issued a 1099-MISC for the settlement amount after suing a CA or JDB?

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I have not been issued one ever, but in a settlement agreement they made specific reference to taxes. They even wrote into the settlement that both side were allowed to discuss settlement amount with the IRS and/or tax professionals only.

Might check your settlement agreement and see if it makes such reference. If not, and there was a NDA then sounds like they violated the NDA by discussing terms of the settlement with the IRS. Might be some legal protection against suing them for that, I have on idea.

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Last year I sued Asset for FDCPA violations. Today in the mail, I get a 1099-MISC, not C, for the total amount of the settlement.

I emailed the attorney I retained to file suit to ask if they can issue a 1099, but from what I read, I think they can.

Yes, that is correct. Assuming your settlement included no compensation for "physical" injury, it is most likely reportable income. The 1099-MISC is proper. Keep in mind, however, that attorney fees, if any, may be deductible. Consult a tax expert to make sure you report this stuff correctly, and to make sure you get all the deductions you're entitled to.

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This is true...and it makes sense. You have income, AA has a business expense deduction. The 1099-MISC sets that straight for both parties. Your attorney also has to declare income, which then entitles you to an equivalent deduction, so his/her fee is a deduction from the 1099-MISC face value.

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I have seen a few people getting the 1099-c on cic,I was wondering can the same debt be written of twice to the tax payer,example the bank writes it off then midland funding writes if off by sending 1099-c to the consumer is this legal.

Edited by racecar
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I have seen a few people getting the 1099-c on cic,I was wondering can the same debt be written of twice to the tax payer,example the bank writes it off then midland funding writes if off by sending 1099-c to the consumer is this legal.

I'd challenge them on that one. The 1099 may be for the balance of the debt, because they consider that as income to the debtor. The OC washes their hands of it and writes off the entire amount of the account. On the other side of the ledger, they have to declare as income what the JDB paid them. I think the only thing the JDB could write off would be the amount they paid for the debt if they can't collect anything. It would be interesting to see what they do write off, though.

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Them issuing a 1099 does not make a difference on the tax liability. You should claim it in your filings either way.

What box did they put the amount in? If its not in box 3 I would sue for another FDCPA violation for misrepresenting the character and amount of debt, if they didn't correct it when I asked. I would also file a complaint with the IRS.

Edited by gowyo
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