Dynamic Recovery Solution threats

[creonxxx]

When does it finally end? Thanks to the great advice here I thought I'd finally got this off my back. Every C.A. hounding me on stale debt had stopped after implementing all the suggestions here. I'd finally shut Midland and Portfolio off for good. Silenced the ridiculous threats from Vanderbilt and Associates. I was even able to get a bogus payday loan on my credit report removed. Scores are all up and healthy while also making sure those agency's no longer pull runs on my credit reports month after month. Things were looking great and now today....... A call from Dynamic Recovery Solutions. Never heard of them. There threat was different and very disturbing to me. I'm so beyond sick of this type of treatment that I've had it. I've been through too much over the years with all this nonsense.

She didn't ask for any SS number she had my name by phone id. So she went right into her babble. She gave me no account number original or their own. Gave me the original company's name which was some name with union in it. I said I never heard of them. Then she said Citibank bought it. She then stated an amount that in my lifetime I have never owed to anyone. ( over 8,000.00 but said they'd take 3,000)

I repeatedly said I have no knowledge of this debt. I asked her to send me accurate validation. I also asked when was the last payment made on this debt I have no current knowledge of? She stated no they would not send me validation since the original creditor had made me aware of the debt repeated times years ago when billing me. She then told me the last payment was in 2003. I quickly countered with thanks for telling me when delinquency began. I said 2003 is well past my states SOL for successful prosecution. Who would be stupid enough to pay anyone over the phone on a debt that can't be taken to court nor is there any current validation as to the actual amount or the debtor? This is where it turned weird...

She stated that while it is true the SOL on the debt had passed that doesn't mean I still don't owe on it. Again, I pointed out I don't know that this is my debt but if it were and given the age of it I'd refuse to pay as it would be my right to make that choice. She said, not really. I will put down a refusal but now I have to fill out a 1099 and file with the IRS and unearned income and they will collect against you and will place a levy on your home and checking accounts. I said, excuse me? and she hung up.

I've been researching this little game and it isn't making since to me. She threatened me with filing a 1099 form with an amount I know I've never owned. Refused any validation as well. Her company is not the original creditor. How can she do that or was this another one of those scam games to scare me? Taxes on 8,000 bucks is something I cannot afford right now and I would hope i'd be notified if someone pulled this on me.

I am so sick of this. The level of harassment allowed to be placed on those with debt that turns into stale debt is so out of hand. Initially trying your hardest to get the Original creditor to work with you in regard to reasonable payments. Trying to survive. Being threatened with destroying your credit score if you don't pay it all that day. Wondering where you are going to get the gas to get to work, and the money to eat if you do pay this huge payment. Thinking they've agreed to a payment only to see the following day they've began a process that will haunt you for the next 7 years. Working around the scores and threats trying to survive. Fraudulent collection postings to pulverize your name financially when they do a run and see after so many years little by little things are being cleaned up on your reports and they'll be damned if they will let you start over in life. Illegal bullying tactics by thug like collectors while the family down the street who was repeatedly popped for drug selling serves a pathetic weak sentence and we are told as a society leave them alone they've done their time. And now this? I just lost my mother to cancer. I'm paying off a huge funeral expense.

Can this C.A. file a 1099 fairly? and did she have the right to threaten me like that?

[racecar]

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf

http://transition.fcc.gov/cgb/policy/TCPA-Rules.pdf

Home | California FDCPA Attorneys and Lawyers - Suing Abusive Debt Collectors

1099-C: The Worst Tax Mess of the Year? | Credit.com News + Advice

Tax Help: How to Dispute A 1099-C Form | Credit.com News + Advice

Edited August 24, 2012 by racecar

[debtorshusband]

I haven't looked at racecar's links, but by the looks of the names there's probably some good stuff there.

First, let me say that you should relax. I don't think you have much to worry about. Your biggest mistake was talking to this woman on the phone. Think about how much less stressed you would be if you had just said "Put it in writing" and hung up.

Which brings me to my next point. This phone call was an initial communication, and unless she informed you of your rights to dispute per the FDCPA, they now owe you a letter within 5 days, which must state how much they want, who wants it, and it must spell out our rights to dispute the debt and request verification (read the FDCPA, section 1692g) Upon receiving that letter, that's when you request verification - in writing. Asking on the phone was a (minor) error on your part.

If they don't send that letter, they have violated the FDCPA.

Technically she was right when she said that even if the SOL has expired, you still owe the debt. But since they can't sue to collect, they are pretty impotent. All they can do is call and write, and you can easily put an end to that by sending them a Cease Communiciation letter as provided by the FDCPA section 1692c.

Finally, as for the 1099C, if a triggering event occurs requiring the sending of one, it must be sent by Feb. 1 of the following year, for you to include in your tax return. If they don't, you don't need to pay and they are in deep trouble with the IRS. I suspect that for a 9 year old debt, the window for them to send a 1099C is long past. You'll want to get confirmation of what I'm saying, though. Oh, and if a 1099C includes interest, the amount of the interest must be broken out on the 1099C. Do you really think these jokers have the records to produce an accurate 1099C, even if they are entitled to send one?

Like I said, I think this woman was full of hot air.

Good luck,

DH

[BV80]

If you don't want to fool with them, since you know who they are, you could also simply send a cease and desist letter. Tell them to never contact you again in any way. Send it by certified mail, return receipt requested.

[TomnTex]

It sounds like you got a hold of some bottom feeders. There out there and they will keep coming back, if not the same ones it will be whoever they next sell your ALLEGED account to.

As Sea said, either Tell them to send it to you in writing within five days and hang up or don't answer at all. If you have been on this board very long, you know that we recommend that you not use the phone, do all correspondence by us mail CMRRR., start a file on any new JDB, log all calls answered or not, have a recorder ready to go and take a pix of your caller I.D. There are more things you can do but, this will get you started.

Just calm down, keep the faith and know that all JDB's will use threatening tactics to try and get you to pay, even to send a few dollars so that you can restart the SOL, which you do NOT want to do.

Just remember, you are in control, not them! That is why it's best to stay off the phone and if they catch you by surprise, then just quickly, tell them to send you a letter that you will not talk on the phone where they have control.

Stay calm, come to us and we will get you through it. Remember, they want you upset and confused so that you will pay or make a mistake.

Good luck.

[creonxxx]

Thanks guys. This new threat just really threw me. You've given incredible advice in the past which worked beautifully. I took on the big guns ( Midland, Portfolio) and go them off my back but now here comes these little maggots with a different kind of a threat.

I would hope if a 1099 was filed there would need to be some validation on the amount. That 8,000 scares the hell out of me. I've never had a debt that large and I would be ruined if out of nowhere my checking was frozen for the taxes on that. Would I be notified before they froze any accounts so I could appeal? I do tend to think the worst to be prepared. This last year has been a nightmare for me personally so I say these days anything even the bad is possible.

I'm so sick of being harassed by all these collectors on debt that is so old. I feel like I'm in a constant race that began almost 10 years ago when I tried and tried to fairly resolve every debt. I'd pay huge amounts and realized no matter what I did they were killing my credit scores because the amounts just weren't enough for them. I'd even get rude comments saying... Oh well it will go on your report for the next 7 years. I had no money left after their escalating amounts so at that point my theory was maybe if they would sue me for non payment we could come to a better payment plan. I had to live and I was more than willing to make payments but the amounts that kept growing were impossible to handle.

The price I've paid has been ridiculous. Only two cards remained fair and to date they are paid in full and I still have open accounts with them. The others? They never sued. They decided to destroy my name financially. Eventually they sold it off to thugs sitting in a cubicle who then threw their horrid sauce into the mix of constant credit runs and harrassing calls.

I'm so tired of this being invaded in my own home by callers pulling this routine. Yes I know how to cease the calls. I know my basic rights when it comes to state laws on collection but when they throw this newest threat out and you realize now this could happen and you don't have the money you think this has to end at some point. Whats to stop each old debt from resurfacing again and again and getting a 1099 on each one?

[debtorshusband]

I've never had a debt that large and I would be ruined if out of nowhere my checking was frozen for the taxes on that. Would I be notified before they froze any accounts so I could appeal

You don't need to worry about this. And she lied when she said "they will collect against you and will place a levy on your home and checking accounts"

The way it works is they report the "unearned income" to the IRS, and you get the 1099C telling you the amount. Then you must report this amount on your 1040 tax return, it's added to your other income, and then your taxes are based on the resulting total. If you can't pay the resulting amount, that's when you start haggling/fighting/negotiating with the IRS. Oh, and I seem to remember something about if you were insolvent at the time, you can get out of paying the tax on the 1099C amount.

Now, I really think your time is better spent worrying about something else. The very threat to send a 1099C might have nothing more than that. If you do get a 1099C, your next step will depend on what's on it, but I'm betting you would be contacting the IRS to complain that what was sent was improper.

It can't hurt to learn more about the 1099C, read racecar's link on how to dispute a 1099C, etc, but that's all just a precaution. I really doubt this threat will ever materialize.

Good luck,

DH

[creonxxx]

Wow I hope you guys realize how invaluable your support is. I won't lie. I've been up well past my bed time trying to drink in as much info as I can with all of this. After reading debtorhusbands last comments I think I can relax a bit. I kept thinking by next Friday I'd have the IRS freezing my checking account. Yanking funds I cannot afford to be taken out right now. Unless I'm reading it wrong you are saying if and that's a big "if" a 1099 was filed as of yesterday they'd request tax's ( payment ) on my next years returns. Correct?

You can bet good money if that 1099 is filed I will be immediately contacting the IRS. The links provided have been a great catalyst to be one step ahead should it happen. I am contacting the one lawyer provided in the link to ask about the threats and also refusal by the company to provide any validation. I also am pretty sure I've found the platinum card they called about. I was pretty organized about my past debt when I reluctantly made the choice to stop payments. When you read the requested minimum you'll understand how impossible these payments were to meet and keep in mind this was one of a few cards.

In a lock box I kept the cards and the one bill associated with each card showing when non payment began and how much the actual credit amount was. My theory was should any of them sue and ask for amounts beyond the principal I'd fight for the amount of credit given and not any elevated numbers. I'd also have documentation from the original creditor when delinquency began making sure no one filed beyond the SOL and an idea when the 7 1/2 years was up from time of delinquency to make sure it was gone off my credit reports. As i said when i made the reluctant choice to not pay I accepted they could sue and maybe just maybe a judge would administer a fair workable payment solution. However, I didn't want to be blindsided with nonsense during the 4 years and after.

This particular card was from ATT Universal. I don't know where she got the word "union" in that. Anyway, It's the only Platinum card I had so this has to be it. The principal amount was 3900. Based on late fee's for no payments starting in Sept of 2003 the minimum requested for November was 987.64 ( this was the type of brutal payments I was being handed. I had 4 other cards doing the same thing to me ) bringing the balance based on finance charges and late fee's to 4,472.02. However, this collection agency that called yesterday claimed double the amount on the principal was what i owed at the time when delinquency began but they were willing to offer me a break for what appears to be 500 less the actual principal. I believe she said 3400 would be acceptable but again claimed the amount due was over 8,000. What a joke. I thought I read some place C.A's are not allowed to ask past the original debt? Could be why they won't show validation? These fools didn't even give me the 3900 dollars worth credit. What it appears she tried to do was get every last penny on the original debt minus almost what would be non taxable. I believe the first 600 is non taxable. She then played this off as a kind offer inflating the original amount. Not to mention they Paid chicken feed for this old debt knowing they couldn't resolve the amount in court and hoped to scare me into quick payment. It looks like Money Laundering. So yes I'd be contacting the IRS.

If this goes any further I'll definitely be posting asking a ton of questions. I will also let you all know what the lawyer states about this whole 1099 threat.

Again thanks debtorshusband for making me realize the IRS will not be sending me into the streets next week I think this whole filing a 1099c on stale debt needs to be addressed and protected against.

[WhoCares1000]

Actually, they can add interest according to the contract so $8000 does sound right but I would not worry about that because you have no intention of paying anyways.

Now with the 1099c stuff, I think the collectors have that in their scripts because of all the propaganda surrounding the IRS. They are playing on your fears. What gets rid of those fears? Information.

First off, the IRS is not going to be putting a lien on your house or taking your checking account next week. In fact, they would not be doing that stuff this time next year because of the letter process they have to follow first. You have time to research and nothing to worry about.

If there is a triggering event requiring them to send a 1099-C, those have to be sent out by February of 2013 to be included in your taxes of 2012 which you have to file and are due in April. Even if they send it out now, nothing is due until April 2013.

Not only that but if the 1099-C is for $8000, that is not the tax. That is your income and the tax is a percentage of that. Now most Americans in this position are either in the 15% or 25% bracket. This means that the tax would be $1200 - $2000 if you have no deductions to offset the added income.

Now, if you are like most Americans, you get a tax refund which is simply an overpayment of taxes. The average refund last year was $2900. That would wipe out the additional taxes from the 1099-C and hence you are done.

Now lets say you have no refund coming for tax year 2012 and you cannot pay the full amount right away. You can make a payment plan with the IRS. If you submit a plan to pay off the taxes in 3 years AND you owe less than $25000, the IRS MUST accept your plan. Offer $100/mo and this get paid off 2 years max (that includes the interest).

Also realize that the IRS has better trained collectors than the JDB. They will work with you AND they will tell you the truth. In fact, you want to have fun with the JDB collector, tell them that you are fine with the 1099 because then you will be talking to an intelligent human being. That will get their goat.

Finally, this is a one shot deal with weapon that is not really accurate. Once they shoot this gun, they cannot do it again no matter what happens. They can still contact you about the debt (but that is up in the air with the courts) BUT they cannot send another 1099-C so you can tell them where to shove their debt with impunity.

With all that said, if you end up on the phone with this person, when they use the 1099-C threat, tell them to please send it (and they will use the threat again in hopes of scaring you again). That will stop that threat dead cold because the fear does not work anymore.

[debtorshusband]

Some good new stuff from Whocares1000, and some confirmation of things I said.

I should have thought to suggest this before, but it took awhile for me to realize you might not have thought of it yourself. You can go to the IRS website at Internal Revenue Service and download Form 1099-C and the instructions for it. That will give you a lot of answers, straight from the source.

Regards,

DH

[creonxxx]

Thanks again! All good stuff. Feeling much better today about all this nonsense. I'm waiting for a response from a lawyer because I'm real curious what their take is on a c.a. that uses the name of the IRS as some thug that will allegedly freeze accounts and put liens on things the second they are notified. I'd imagine the IRS would want that slop stopped real fast and it would explain how it really works.

On one complaints board about this company that uses the 1099 as a threat they said the caller said when the IRS suddenly "comes after them and takes everything" the government will make sure you never can get a car or home loan ever again. They would probably lose their job out of embarrassment and it would be impossible to find work for being a deadbeat loser. It was ridiculous.

I loved the suggestion to tell them to send the 1099. I think what I should say is that I thought they already filed and if they did what the hell are they calling me for? the debt would have been cleared. Unless someone lied to me hahaha.

[TomnTex]

As was mentioned about the 1099-C, it should be a one shot deal and then everything goes away. But, I have heard contradictions to that, but no proof. If you were insolvent in the year that the 1099-C was issued, and that should be, I think, within 36 months or so, of the default that they have to issue it. Otherwise, it should be hot air and a threat they are throwing around to scare you.

In other words, if you have not received a 1099-C as yet for that year of default and it's past 36 months (check me on this), then they can not do it.

I just went through a 1099-C this year for the default year of 2008. So, find out when you defaulted and go from there.

Edited August 25, 2012 by TomnTex

[debtorshusband]

creonxxx, make no mistake, she lied to you and in doing so violated the FDCPA. But I kind of let that slide to concentrate on alleviating your concern that your money was in immediate danger. Also, without a recording of the conversation, you won't be able to prove they broke the law, so it didn't seem important to spend much time on the point.

Perhaps you want to consider getting yourself set up to record phone conversations, then welcoming another chance to talk to this lady on the phone.

Regards,

DH

[WhoCares1000]

The 1099-C thing is a one shot deal in the sense that they supposedly can only send it one time. Someone can still try to collect on the debt BUT a debtor can also simply tell the collector where the creditor can shove the debt, especially since it is an out of SOL debt. Now another JDB can try to send another 1099-C down the road for the same debt and that would have to be argued in the courts (and this is a case where I would pay a good tax attorney to argue this) but for all intents and purposes, once you get a 1099-C and pay the tax, the collector cannot use that threat again.

As for the threats on what the IRS will do, the IRS has taken the position that any propaganda that helps them collect taxes is good. On that basis, I doubt that they would try to stop these collectors. The reason we have as high a tax compliance rate as we do in this country is because of propaganda like that. Expect no support from the IRS to stop these threats.

If the call is recorded, then you could sue under FDCPA but I am going to be that in the end, the JDB settles, considers this a cost of doing business, and continues making these threats to all their other debtors because they are effective and no one will really stop them.

[usagi555]

The 1099-C thing is a one shot deal in the sense that they supposedly can only send it one time. Someone can still try to collect on the debt BUT a debtor can also simply tell the collector where the creditor can shove the debt, especially since it is an out of SOL debt. Now another JDB can try to send another 1099-C down the road for the same debt and that would have to be argued in the courts (and this is a case where I would pay a good tax attorney to argue this) but for all intents and purposes, once you get a 1099-C and pay the tax, the collector cannot use that threat again.

As for the threats on what the IRS will do, the IRS has taken the position that any propaganda that helps them collect taxes is good. On that basis, I doubt that they would try to stop these collectors. The reason we have as high a tax compliance rate as we do in this country is because of propaganda like that. Expect no support from the IRS to stop these threats.

If the call is recorded, then you could sue under FDCPA but I am going to be that in the end, the JDB settles, considers this a cost of doing business, and continues making these threats to all their other debtors because they are effective and no one will really stop them.

The propaganda is one thing, but in reality, the IRS is much kinder and gentler than they used to be. So long as you aren't actively trying to evade paying your taxes, they will general work with you, even when you owe several hundred thousand and have had your income reduced drastically.

[WhoCares1000]

The propaganda is one thing, but in reality, the IRS is much kinder and gentler than they used to be. So long as you aren't actively trying to evade paying your taxes, they will general work with you, even when you owe several hundred thousand and have had your income reduced drastically.

You are absolutely correct. In fact, all the IRS really is is a huge cumbersome inefficient collection agency for the government. They have powers that most creditors do not have but they only use them if the gentler stuff does not work. Plus, they can only collect on debts they have the legal authority to collect on (taxes, student loans, child support, etc) and for the anything other than taxes, only by taking refunds. They cannot and do not collect on consumer loans nor use their powers to collect on consumer loans.

However, the average taxpayer probably does not know either the tax system or how it relates to debts. That is where JDBs can exploit this lack of information to make you afraid so that you will do something that if you were not afraid, you would not do. This 1099-C thing has worked for this JDB so much that they probably use it on anyone that refuses to pay any debt. They figure they can lie because the person on the other end does not know the truth anyways (or if they do and do file a FDCPA claim, it is a cost of doing business). In fact, the OP was very afraid from this threat at first. Now that the OP has the facts, they realize that their fear was for naught. That is why if any collector threatened me with a 1099-C, I would tell them to send it and if they tried to discuss IRS levies and garnishments, I would explain to them how the tax system really works. That would stop that threat, at least for me.

The real problem with the 1099-C issue is that they are not being issued properly. They are not issues when they should be and many contains errors. The IRS is assuming that the 1099-Cs are correct and if you have an issue, you need to talk to the issuer. The only way this will be solved will probably be through a class action with the issuer and the IRS as defendants. The IRS has already lost a couple of cases surrounding 1099-Cs.

We also need to teach people how our tax system really works and how cancelled debts work into the rest of the system. If a debt of $10,000 is cancelled, that is not what you will pay the IRS. First, the $10,000 is added to the rest of your income, then that total income is reduced by deductions and above the line credits, then your tax is determined as a % and bracket of your income after deductions and above the line credits, then you have the below the line credits which reduce that tax. The actual tax will come no where near the $10,000. Not only that but the tax is then due on the IRS schedule, not when a JDB decides they want it due and then the IRS becomes the collector and you use their process, not the JDBs.

[usagi555]

You are absolutely correct. In fact, all the IRS really is is a huge cumbersome inefficient collection agency for the government. They have powers that most creditors do not have but they only use them if the gentler stuff does not work. Plus, they can only collect on debts they have the legal authority to collect on (taxes, student loans, child support, etc) and for the anything other than taxes, only by taking refunds. They cannot and do not collect on consumer loans nor use their powers to collect on consumer loans.

However, the average taxpayer probably does not know either the tax system or how it relates to debts. That is where JDBs can exploit this lack of information to make you afraid so that you will do something that if you were not afraid, you would not do. This 1099-C thing has worked for this JDB so much that they probably use it on anyone that refuses to pay any debt. They figure they can lie because the person on the other end does not know the truth anyways (or if they do and do file a FDCPA claim, it is a cost of doing business). In fact, the OP was very afraid from this threat at first. Now that the OP has the facts, they realize that their fear was for naught. That is why if any collector threatened me with a 1099-C, I would tell them to send it and if they tried to discuss IRS levies and garnishments, I would explain to them how the tax system really works. That would stop that threat, at least for me.

The real problem with the 1099-C issue is that they are not being issued properly. They are not issues when they should be and many contains errors. The IRS is assuming that the 1099-Cs are correct and if you have an issue, you need to talk to the issuer. The only way this will be solved will probably be through a class action with the issuer and the IRS as defendants. The IRS has already lost a couple of cases surrounding 1099-Cs.

We also need to teach people how our tax system really works and how cancelled debts work into the rest of the system. If a debt of $10,000 is cancelled, that is not what you will pay the IRS. First, the $10,000 is added to the rest of your income, then that total income is reduced by deductions and above the line credits, then your tax is determined as a % and bracket of your income after deductions and above the line credits, then you have the below the line credits which reduce that tax. The actual tax will come no where near the $10,000. Not only that but the tax is then due on the IRS schedule, not when a JDB decides they want it due and then the IRS becomes the collector and you use their process, not the JDBs.

Absolutely. I myself don't understand the tax system near well enough. Although, if I had a JDB threatening a 1099-C on me, I would learn it very quickly. If I had one issued, and I knew it was improper, my conversation with the IRS would be along the lines of "Yes, the 1099 was improper, but I don't expect you to believe that at this point. I am currently bringing suit against the JDB to recover the taxes that you believe I owe. You will be getting paid, ultimately by them, one way or another."

[Torden]

Absolutely. I myself don't understand the tax system near well enough. Although, if I had a JDB threatening a 1099-C on me, I would learn it very quickly. If I had one issued, and I knew it was improper, my conversation with the IRS would be along the lines of "Yes, the 1099 was improper, but I don't expect you to believe that at this point. I am currently bringing suit against the JDB to recover the taxes that you believe I owe. You will be getting paid, ultimately by them, one way or another."

I had one threaten me with a 1099-C for a debt to a bank I've never done business with. My plan is NOT to ask for the taxes back, but rather, to ask for the income they CLAIM (in the 1099-C) that they have given me but failed to deliver. They already know I disputed the debt. They sued for it and when they saw my dispute and evidence, they MTD'd. I wasn't quick enough to counter sue. I don't expect to get that amount. But that's my starting point.

[creonxxx]

My starting point would be contacting the IRS quickly and stating it's an improper file. Next, contacting the one who issued it and asking for validation on the amount which has never been offered on the debt. Because I claimed I have no knowledge of this debt when the junk debt buyer called and threatened me I'm sure they believe I have no way to prove what that amount was. It's my one web I want them to step in and screw up very bad all on their own. I will never let them know I have complete documentation of all my old debts along with the associated cards.

I could give a lot of advice to a person stepping into debtor hell and right up at the top of the list is to keep at least one bill showing when delinquency began and the card that goes along with the bill. I was actually told just shred and toss it all and move on with my life but for some reason I just felt it was best to have them available. Honestly I don't even know if this debt is legit given she never gave an account number and used the word "union" platinum which I don't have. However, I did have the universal platinum.

This dialogue has been fantastic in regard to the 1099c situation. I found some Interesting information about good ol Portfolio getting popped for sending in a mound of them in either 2010 or 2011. The con was to file on millions to get back close to 1 million. There was another scuzz agency that was popped for it as well. The triggers to fairly file and WHO can file are interesting and do work in favor of the debtor against a stale debt filing from a jdb but you've got to do the ground work to prove it. What amount exactly should they try to file for seeing as how you never contracted with them for the original debt and they are not a financial institution. What was their real loss? And as far as timing it would have been up to the o.c to file up to three years after non collection began. I never thought I'd be adding all this stuff to my situation. If this behavior by jdb was acceptable it suggests the best recourse is bankruptcy which is the last thing anyone wants but it would appear the easiest solution to stop the calls, the lawsuits, the threats and stop this nonsense. It's time the law makes it absolute with no loopholes that a debtor is absolved after a certain period of time. Done and over. If the o.c didn't sue during the SOL then the debtor is at no fault to exact their right after the SOL to refuse. Severe penalties for filing after the SOL and After the 7 year trashing of their credit it's done. Move on.

Understanding the procedures with the IRS in general when it comes to the 1099c situation is so helpful as the one poster said it really deflated my anxiety over the threat. I've been granted knowledge and tools in advance should it actually happen and know in general the threat is non acceptable.

Edited August 26, 2012 by creonxxx

[WhoCares1000]

You do have a point when it comes to 1099-Cs. The rules should be set up in such as way where there is a trigger event where the debt is no longer legally collectable (legal SOL, Report SOL, or BK) and then the 1099-C is issued in that year and that is it. The problem though is all the tolling rules and stuff. It is very hard to tell if a debt is really no longer collectable except for BK or if a judge rules as such.

[WhoCares1000]

My starting point would be contacting the IRS quickly and stating it's an improper file.

The problem is, the IRS will tell you to deal with the sender of the 1099-C and as far as they are concerned, it is correct unless YOU can prove otherwise which is a very high bar to pass.

[creonxxx]

The problem is, the IRS will tell you to deal with the sender of the 1099-C and as far as they are concerned, it is correct unless YOU can prove otherwise which is a very high bar to pass.

There is no doubt. In fact that's pretty much a given. I'd do it as my starting point not expecting one ounce of help or support from them but as the time moves on dealing with the one who issued it they could see a time line that immediately included my complaint. I'm sure a tax lawyer would ask me if I had contacted the IRS yet to have it on some record that I know the filing was improper.

The more that I have read about this particular agency ( Dynamic Resolution ) the more I can see it is part of their game to threaten with the whole IRS is going to crush you. I don't know how big of a company they are but I'd imagine they'd have to attempt what portfolio tried and send in tons all at once if they wanted to make some money. Noting it's a growing issue with some JDB they may want to not even go there.

[creonxxx]

Recent 1099c case.

Tax Court thwarts Collection Agency's use of 1099-C Cancellation of Debt

Tuesday, May 29, 2012

Tax Court thwarts Collection Agency's use of 1099-C Cancellation of Debt

US Tax Court the ports collection agency tactic of filing IRS form 1099-C for cancellation of indebtedness income. One technique used by many collection agencies is to threaten a debtor that if they do not make a payment the debt will be reported as "canceled". This means the person will have to pay taxes to the IRS and their state income taxes on the alleged amount of money due.

In the case of Stewart v. Commissioner an astute taxpayer fought this 1099-C technique.The taxpayer owed a credit card debt to MBNA bank and stop paying on it in 1994. The bank charged off this debt in 1996. In 2007, the bank sold the debt to a collection agency called Portfolio Recovery Associates. When the taxpayer said the debt was charged off and refuse to pay anything, the collection agency threatened him with filing a cancellation of debt with the IRS.

The taxpayer fought this case in Tax Court and won. The Tax Court determined that the debt had been written off long before the collection agency acquired it and therefore the taxpayer did not owe tax by the collection agency's tactics

I'd post the link but It says I need to have made 20 posts to do that. Sorry!

[Torden]

See here:

http://www.creditinfocenter.com/forums/there-lawyer-house/313643-pra-1099c-irs-help.html

[WhoCares1000]

But the debt collector does not get anything if the debtor insists on not paying and they issue a 1099-C. This only works if they can scare the debtor by lying and hoping that the debtor does not know how income taxes work (which unfortunately in this country is most people).