Helena

1099c from Chase after they lost in court

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Update from a rock star tax preparer: DISCLAIMER: he was a tax preparer, not a tax lawyer or IRS agent, nor did I hire him for services. This is not my advice, just something a 30 year tax preparer who specializes in bankruptcies, etc. suggested to a friend in a similar position.

He said, if you get a 1099c, and you have GOOD proof it was disputed, dismissed or the like (not just dispute on credit report, you need court papers, etc.) he claims attaching forms to IRS is a waste of time and a red flag. Just leave line 21 blank as he said and mail it in.

Here's why: if the IRS catches it, in other words, matches chases claim of dismissed income to yours, they're going to audit you, and even if you originally sent in your proof, they're going to call you in, ask for the papers and say they lost them.

He advised my friend to roll the dice, because the IRS has bigger fish to fry. In other words, if they're gonna get you, they're gonna get you, so why call attention to yourself? There's a good chance you might sail through.

Chase (and dozens of other banks, collectors, etc.) are bogging down the already bogged down system with screwed up 1099cs, etc., it's rare that they will audit for $1000 of tax money, which will cost them at least that much in time to collect if you dispute.

And it's the IRS job to get chase to correct it. At least that's what I was told.

That being said, the IRS calls people in for less than $1000 so......it's each persons call.

I just wanted to share one more expert opinion.

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I got one of those "We won't pursue, and are sending a 1099C" letters from Chase, too.

 

The 1099C has yet to arrive. 

 

I don't want to add the income for 2013, in case they decide to send it as 2014 income. 

 

Has anyone else gotten the letter, and not the form? 

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This pertains to me and my situation - I received a 1099C from Chase in Jan and I entered the amount that was in line with my figure on line 21 of my 1040.  I also attached a 982 claiming insolvency to offset the entry but the tax was figured on the total AGI before the 982 adjustment. 

 

I sent my federal by mail on the 4th of Feb and I watched the website for the status of my refund. 

 

This morning Mar 1, 2014 it was updated as 'refund approved' and I would have the refund deposited to my bank account on the 5th.  It showed my refund as the total I originally expected before adjustment.  I haven't received any notification from the IRS showing an adjustment, but that could come later.

 

My personal method handling these 1099C's is to wait until time that I receive one then I would either claim it for the current year's filing period or file a 1040X for the reported filing period.  I have records that show what should be written off and if they are within a resonable neighborhood then I won't fight it.  If I never receive one from the creditor then I can't see how I can file an accurate one. 

 

I was told by a rep from the IRS to call in August each year to see if there are any floating around for me.

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I was told by a rep from the IRS to call in August each year to see if there are any floating around for me.

 

That is some crazy advice. Not only might you receive a 1099 that they never planned on sending, but it might just get you an invitation to court.

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That is some crazy advice. Not only might you receive a 1099 that they never planned on sending, but it might just get you an invitation to court.

Where the hell did you get the idea I would call the creditor.  I was told to call the IRS to check on any filed 1099C's that wasn't sent or miss-sent to an old address of mine.  As far as a court invitation try not reporting income when you have received a 1099C from a creditor and see how the IRS feels about that.  Not reporting income is a federal offense and definitely get you an invite.  I've never advocated avoiding taxes by not reporting income. 

 

Go chase your windmills somewhere else

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Where the hell did you get the idea I would call the creditor.  I was told to call the IRS to check on any filed 1099C's that wasn't sent or miss-sent to an old address of mine.  As far as a court invitation try not reporting income when you have received a 1099C from a creditor and see how the IRS feels about that.  Not reporting income is a federal offense and definitely get you an invite.  I've never advocated avoiding taxes by not reporting income. 

 

Go chase your windmills somewhere else

 

No need to get all upset over nothing. Most of us are on the same side here. I misinterpreted what you were trying to say in that last sentence. I never said anything about you avoiding taxes. 

 

You won't see me chasing any of those windmills around here. Most of those GE 2.5 MW's will cut you into pieces. Not to mention since they are probably financed by GE Capital and I wouldn't want them to know I'm alive.  ;-)  

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i AM relieved to see all these other folks having issues with Chase........I owed them 20,000 when i stopped paying in 2010 due to filinf for disabiility which i am now on........this year i got not an actual 1099C IRS from but a copy and pasted version on Chase letter head........i filed dispute with the FCPB and got a letter from Chase stating that that is what they sent and they don't have to send me an actual "irs" form........they used the code "G" - at this same time i start receiving calls from portfolio recovery who never leaves a message........i ordered my credit report from experian and it indicates tht this debt from Chase is still in collections............so my question is........to i fill out a form for insolvency or not? I see tax guy tomorrow and he says he has rarely seen these forms until recently........I used to file jointly with husband, but seeing this tax year is messy already as i have to do ammendments on last two years to adjust for my lump sum ss disability, i am thinking i should file seperately as he still works full time.........i have a small pt job allowed by ssd as i only earn about 8500 per year which is well below the sga..........any suggestions any body??  I hate Chase......ironically i used to wrk for their collections department when they were not issuing these.........they also claimed in the letter that Chase took a huge "loss" on my debt on April 29, 2011 and the debt subsequently went out to numerous collection agencies but was never sold and was just recently returned to them........???

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I think i knd of posted in the middle of all this even though new question......am new to this but also quite confused with my 1099 C on letter head.........my cr bureau rport says the Chse account is still in collections........i can file insolvency but i don't know.......if Chase claims in leter that they took a huge loss on April 29, 2011, it seems to me that it is odd that i am getting notified of code G in 2013..........are they claiming it twice?  I have also never heard of Chase or any other bank holding onto debt at the same time i am being called by at least 5 different collection agencies over the last 2 years and they returned it to them?? Does anyone understand this?

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aye........assuming that tonight i will be filling out the insolvency work sheet .........luckily i have my credit report showing all by collection "debt" .........figures Chase would do this right before the statute of limitations expired in August of this year........I guess we could still file jointly because my husband says he has a lot more cr card debt than he has told me..........the insolvency work sheet is a pain.........I don't know how much i paid for my clothing over the years but my guess is if i went to sell everything would not get more than 200.00........and my computer.........it is like 8 yrs old......i wonder why they ask all this stuff........i could see bank accts.........not even......savings yes but my checking is not exactly an asset as i have outstanding cks and auto pays.......and i do not even know why i have to list my ssd (thank God we used the lump sum already to pay off people we owed last March) but no debtor can touch my ssd except the IRS dang it.......oh well, like you say, hopefully the tax guy will just fill out a 982 and i can put this year behind me.........i really appreciate all of your comments and info..........thanks so much.......

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Just so you know...the SOL is one of the IRS triggers.  If a creditor sues, and you raise the SOL as a defense, and the creditor doesn't get a judgment...the IRS requires the creditor to issue a 1099c.  You would still owe taxes on an SOL debt.

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