qbert Posted April 17, 2018 Report Share Posted April 17, 2018 i have a discover acct, last pay was in march of 2010 no contact from creditor since last collection letter in january 2014 they 1099C'd for effective date 12/31/17, event code G ("Decision or policy to discontinue collection." per IRS) from creditcards.com: Q: Why am I getting a 1099-C for old debt? Unfortunately, creditors have a lot of wiggle room about when to report canceled income to the IRS. Statutes of limitations vary by state and by type of debt, but creditors are not required to file a 1099-C at that time since they can continue to try to collect on a debt indefinitely. Consumer advocates argue that under IRS guidelines, creditors should send a 1099-C three years after there has been no activity on the debt, but they acknowledge the rules are unclear. And plenty of taxpayers have been getting 1099-Cs for debt that's many years – or even decades – old. If this happens to you, first try calling the creditor. "Sometimes when you go to the creditor, it turns out it was a mistake and they will issue an amended one," says Greg Fitzgerald, an attorney in Orange County, California, who specializes in debt. If that's not the case, you will need to include the 1099-C on your tax return. A tax professional can then help you evaluate your options. You can either try to explain to the IRS why it should have been filed a long time ago and make that case as part of your tax return. Or it may be easier to simply use one of the exemptions to avoid paying on the amount. However, the age of the debt can work against taxpayers, Bode says. The time of financial hardship that caused the debt to go unpaid may have passed, leaving the taxpayer with reduced ability to exclude the debt from income because of insolvency. ^^that last part in bold is me right now any escaping this? There is no way i can claim any sort of insolvency in 2017. Its well past SOL of course...not sure that helps here. Quote Link to comment Share on other sites More sharing options...
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