bmc100 Posted February 4, 2012 Report Share Posted February 4, 2012 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? Link to comment Share on other sites More sharing options...
Coltfan1972 Posted February 4, 2012 Report Share Posted February 4, 2012 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. Link to comment Share on other sites More sharing options...
nascar Posted February 4, 2012 Report Share Posted February 4, 2012 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. Link to comment Share on other sites More sharing options...
jq26 Posted February 4, 2012 Report Share Posted February 4, 2012 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. Link to comment Share on other sites More sharing options...
racecar Posted February 4, 2012 Report Share Posted February 4, 2012 (edited) 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 February 4, 2012 by racecar Link to comment Share on other sites More sharing options...
antiquedave Posted February 4, 2012 Report Share Posted February 4, 2012 so far only one came in the mail, I was expecting to get them, my understanding also is that you claim the whole settlement and deduct the expense of the attorney Link to comment Share on other sites More sharing options...
legaleagle Posted February 4, 2012 Report Share Posted February 4, 2012 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. Link to comment Share on other sites More sharing options...
bmc100 Posted February 5, 2012 Author Report Share Posted February 5, 2012 The settlement was $2,500 and the amount of the fraudulent debt was $1,300. Link to comment Share on other sites More sharing options...
gowyo Posted February 5, 2012 Report Share Posted February 5, 2012 (edited) 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 February 5, 2012 by gowyo Link to comment Share on other sites More sharing options...
gowyo Posted February 5, 2012 Report Share Posted February 5, 2012 I think that they can issue a 1099MISC because reporting to the IRS is a legal requirement and no contract can allow for the violation of the law. Link to comment Share on other sites More sharing options...
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