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Can you fight a 1099c?


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 I have a few questions that I am hoping you can help me with.


I have 2 accounts that I have received a cancellation of debt on. I am pretty sure that both accounts were defaulted on in 2007. Could you please give me more information on this. They are both


Citibank accounts:


The first account is income tax year 2009: I ended up paying $1948.00 in 2011 to the IRS. This is a Citibank South Dakota NA- The Citibank account number is 2232**************** and they state this the cancellation of debt was on 12/31/2009 in the amount of $7,273.00. I have already paid $1948.00 (1,875.00 + $73.00 in interest) in 2011 but I think I want to try and see if I can fight it if you think it is possible. I would like your valued opinion. Can I try to recover this money from the IRS?


The second account is income tax year 2011: I just received this notice a few days ago from the IRS. It states I owe tax of $2113.00 ($1,713.00 + $343.00 in Negligence penalties + $57.00 interest) from a cancellation of debt of $6,839.00 on 7/13/11. Is there any way that I can get around eliminating the $343.00 negligence penalties? The second Citibank NA account number is 5454****************. From my research, the credit card company has to report the cancellation of debt the year that is goes in default and they have 36 months after the default of an account to report it. But after the 36 months the debt of cancellation cannot be collected upon by the IRS. Can I get the negligence penalties forgiven? Abatement? I defaulted at the same time on this account as well in 2007.


I need some information from you on these accounts that are beginning to start to haunt me all over again. Can I fight this cancellation of debt on either of these accounts. Can you help me or do you know of someone that can help me get this taken care of. I would really like this nightmare to end at some point. It looks like some of my other accounts may come back to haunt me in the near future when it comes to the IRS collecting on these cancellation of debts 1099c forms. I was with a credit counseling agency and all of my credit cards went into default in 2007.


I would appreciate any help, I am sure that you have heard of this happening to many of your clients. I think it is totally ridiculous and I was never told me that is was going to happen when I signed up for the program in credit counseling program in 2006. Thanks so much for your help. I really appreciate it. I have till March 13th, 2013 to pay the $2113.00 to the IRS. I really need some sound advice and professional help in these matters. Thank you and have a great day.


I am looking for a person that can help me figure this out locally and in person so that I can try and fight this. I may have some upcoming 1099c's in the future. This is a haunting experience.


Thank you so much for listening.

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Couple misconceptions there.  There are a list of "triggers" that specify when a creditor should issue a 1099c.  The 36 month trigger is when they have not attempted to collect in the last 36 months...not from the date of default.  In effect, they coould call you once a year for 30 yrs and not hit that "trigger".


Using the SOL as an affirmmattive defense to fend off a lawsuit is another trigger.  There are several others...


See http://www.irs.gov/pub/irs-pdf/i1099ac.pdf


As to convincing the IRS that you don't owe taxes, the "common knowledge" method is to declare insolvency for the year in which the default occured.  Get IRS Pub 4681 to see how that works. Its not as simple as people would lead you to believe...


and, getting money back from the IRS that you've already paid on a 1099c is very, very difficult.  They will almost certainly audit you.

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Thanks for your input.


Another question. I settled with a 3rd party deadbeat debt collector recently that bought an old debt that was written off by another cc company. It was around $8,000 in 2007. They stated when they sued me that I owed over $25,000. I settled for around $6000. Will I have to pay taxes on the other $19,000 that they forgave? This is all in interest and again the original debt when sold to this third party debt collector was around $8,000. The interest rate was at around 28%. Thank you in advance for your help. I really appreciate it.

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Just type in 1099-C in the forum search box. Lots of stuu here, including the many post I have made on the subject. You got suckered on paying a JDB money on an old debt that was probably past SOL. They paid pennies on the dollar for it. Research on here, spend time reading and you will see why we do not suggest paying JDB's, or settling with them. Even an OC is tricky.

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Actually I fought this to the end, no sucker here. I had a arbitration hearing and tried to fight an SOL among other things. I lost. I had a lawyer as well. This cost me $700.00.


After I lost, I had to pay for an appeal which was $350.00 plus $200.00 to file it in court. I had no choice but to file an appeal with 15 days per my lawyer.


I had a pretrial hearing that was going to be by jury trial. It was going to cost me $4500 plus. The trial would be about 2 weeks according to my lawyer. I would have to take off work for this per my lawyer.


A day before the trial, the jdb called my lawyer and offered a $12,000 settlement. I got it down to around $6500. By the way, it was $25,000+ with interest. If it went to trial there were going for the entire sum.


If you look at this entire situation, I had no choice but to settle, I wasnt willing to put out any more money.


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