Author Topic: how much time does a creditor have to to send a 1099c to IRS  (Read 9356 times)

0 Members and 1 Guest are viewing this topic.

jeff53072

  • Valued Member
  • Posts: 39
how much time does a creditor have to to send a 1099c to IRS
« on: January 01, 2009 04:05:21 AM »
In 2001 and 2002 I had three cases of identity theft where someone got
into my credit cards which I had and got cash advances etc.  These cards had "zero" balances.  I believe they got the information by stealing it out of my mailbox.

I moved in late 2002 and found out about it when I ran free credit reports
on myself in 2006.

I then Demanded Debt validation from the debt collectors and disputed them on my credit report. 

For the most part they been removed.  all are past the SOL.

My question is how much  time after the fraudulent debt goes deliquent does a creditor have to send a 1099c to IRS

I filed my taxes always by April 15 each and every year. I have not heard a thing from IRS or any these so called creditors etc

Kitten

  • Valued Member
  • Posts: 1992
    • MCSD
Re: how much time does a creditor have to to send a 1099c to IRS
« Reply #1 on: January 01, 2009 06:02:30 PM »

My question is how much  time after the fraudulent debt goes deliquent does a creditor have to send a 1099c to IRS

How much time in an infinity?
That's an exaggeration, but if they were to send you a 1099 in 2015 claiming they canceled your "debt", the IRS would be more interested in collecting from you than in going after them for a late filing. If you get a 1099 for a debt you never owed, be prepared to explain it, no matter how long ago you thought the matter was settled.

DefLepGirl

  • Y-E-A-H!
  • Valued Member
  • Posts: 2250
    • :0)
Re: how much time does a creditor have to to send a 1099c to IRS
« Reply #2 on: January 03, 2009 01:46:41 AM »
I'm not getting this one.......

Why would OP be responsible for a canceled debt that he / she wasn't responsible for to begin with.... (IE) ID Theft......?   
~I'm not an attorney (nor) do I play one on the internet.. Take everything I *write* as just my personal opinion and experience~

I love quoting Fleppie / Deflepgirl -  E. Normis  (Ok he actually didn't say it but actions speak louder than words..... or in this case words speak louder oooh whatever he loves it!-

Kitten

  • Valued Member
  • Posts: 1992
    • MCSD
Re: how much time does a creditor have to to send a 1099c to IRS
« Reply #3 on: January 03, 2009 02:12:52 AM »
He wouldn't be, but if somebody has his SSN and sends out a 1099, he better be able to explain it to Auntie IRiS.

Flyingifr

  • -DEAN EMERITUS-
  • Valued Member
  • Posts: 6831
  • Thank you Sears, NCO, AA and the rest for my toy
Re: how much time does a creditor have to to send a 1099c to IRS
« Reply #4 on: January 03, 2009 04:44:46 PM »
The answer to the question is found in a roundabout manner:

The instructions for Forms 1099A and C state:

Quote
Generally, file Form 1099-C for the year in which an identifiable event occurs. See Exceptions below. If you cancel a debt or business before an identifiable event occurs, you may choose to file Form 1099-C for the year of cancellation. No further reporting is required even if a second identifiable event occurs on the same debt. Also, you are not required to file an additional or corrected Form 1099-C if you receive payment on a prior year debt.

The Instructions go on to define an 'event"

Quote
A debt is canceled on the date an identifiable event occurs. An identifiable event is:
1. A discharge in bankruptcy under Title 11 of the U.S. Code for business or investment debt (see Exceptions on this page).
2. A cancellation or extinguishment making the debt unenforceable in a receivership, foreclosure, or similar federal  or state court proceeding.
3. A cancellation or extinguishment when the statute of limitations for collecting the debt expires.
4. A cancellation or extinguishment when the creditor elects foreclosure remedies that by law end or bar the creditor’s right to collect the debt.
5. A cancellation or extinguishment due to a probate or similar proceeding
6. A discharge of indebtedness under an agreement between the creditor and the debtor to cancel the debt at less than full consideration.
7. A discharge of indebtedness because of a decision or a policy of the creditor to discontinue collection activity
and cancel the debt. A creditor’s defined policy can be in writing or an established business practice of the creditor. A creditor’s practice to stop collection activity and abandon a debt when a particular nonpayment period expires is a defined policy.
8. The expiration of nonpayment testing period. This event occurs when the creditor has not received a payment on the debt during the testing period. The testing period is a 36-month fund period ending on December 31 plus any time when the creditor was precluded from collection activity by a stay in bankruptcy or similar bar under state or local law. The creditor can rebut the debt. Use any reasonable method to determine the amount of occurrence of this identifiable event if:
a. The creditor (or a third-party collection agency) has engaged in significant bona fide collection activity during the
12-month period ending on December 31 or
b. Facts and circumstances that exist on January 31 following the end of the 36-month period indicate that the debt
was not canceled.
Significant bona fide collection activity does not include nominal or ministerial collection action, such as an automated mailing. Facts and circumstances indicating that a debt was not canceled include the existence of a lien relating to the debt (up to the value of the security) or the sale or packaging for sale of the debt are the debt by the creditor.

Referring back to the general instructions for 1099,

Quote
File Forms 1098, 1099, or W-2G on paper by March 2, 2009, or March 31, 2009, if filing electronically. Also file Form 1096 with paper forms. Brokers may file Forms 1096 and 1099-B anytime after the reporting period they elect to adopt (month, quarter, or year), but not later than the due date. File Form 1096 with Department of the Treasury by June 1, 2009.

Taking these together, I would posit the following:

In any year that a debt id canceled, the 1099C is due to be sent to the IRS on paper by the February 28 or electronically by March 31 (both dates can be extended by weekends to the following Monday).

The Instructions for 1099C do not give a specific due date for issuance of the form to the debtor, but rather refer to Section M of the General Instructions for Forms 1099. While that section does not list 1099C, it does state that copies of other Forms 1099 should be issued to the recipient on the last day of January following the end of the tax year. 

Section O if the General instructions advises of a $50 per 1099 penalty for failure to provide correct 1099s to the IRS. There is no penalty for failure to provide to the taxpayer.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Morality of Debt? No one ever went to the Nether Regions for not paying a debt.

Founder of the Credit Terrorist Training Camp (Debtorboards)

jeff53072

  • Valued Member
  • Posts: 39
Re: how much time does a creditor have to to send a 1099c to IRS
« Reply #5 on: January 08, 2009 01:50:15 AM »
Thank you, to all that replied.  I believe that the following applies:

3. A cancellation or extinguishment when the statute of limitations for collecting the debt expires.

The three debts are past the statute of limitations.  So I believe that 
none of them will send out a 1099c.

Anyone disagree?


Flyingifr

  • -DEAN EMERITUS-
  • Valued Member
  • Posts: 6831
  • Thank you Sears, NCO, AA and the rest for my toy
Re: how much time does a creditor have to to send a 1099c to IRS
« Reply #6 on: January 08, 2009 09:09:16 PM »
Thank you, to all that replied.  I believe that the following applies:

3. A cancellation or extinguishment when the statute of limitations for collecting the debt expires.

The three debts are past the statute of limitations.  So I believe that 
none of them will send out a 1099c.

Anyone disagree?

Never underestimate the vindictiveness ofa  creditor scorned.
BTW-the Flyingifr Method does work. (quoted from Hannah on Infinite Credit, September 19, 2006)

I think of a telephone as a Debt Collector's crowbar. With such a device it is possible to pry one's mouth open wide enough to allow the insertion of a foot or two.

Morality of Debt? No one ever went to the Nether Regions for not paying a debt.

Founder of the Credit Terrorist Training Camp (Debtorboards)

Anastasia94941

  • Valued Member
  • Posts: 4
Re: how much time does a creditor have to to send a 1099c to IRS
« Reply #7 on: February 06, 2011 10:04:12 AM »
Thank you, to all that replied.  I believe that the following applies:

3. A cancellation or extinguishment when the statute of limitations for collecting the debt expires.

The three debts are past the statute of limitations.  So I believe that 
none of them will send out a 1099c.

Anyone disagree?

Yes, I disagree.  I just got a 1099-C for a debt that was four years past SOL.  I last paid on this debt in December 2002.  SOL ended roughly December 2006.  It rolled off my credit report mid-2010 (7.5 years after date of delinquency - the FCRA says add 180 days, about 6 months, to the delinquency date, then add 7 years to THAT, and that's when it has to roll off your credit).  The form 1099-C was for 2010 and said the debt was canceled on 5/31/10.  I now have to pay tax on the entire amount that was written off, or prove I was insolvent at the time.

Note that I never communicated with the lender, or paid anything, after 2002.  Nor did they communicate with me before sending the 1099-C.  So, the "identifiable event" that triggered the 1099 was not the expiration of SOL, but most likely this:  "7. A discharge of indebtedness because of a decision or a defined policy of the creditor to discontinue collection activity and cancel the debt. A creditor's defined policy can be in writing or an established business practice of the creditor. A creditor's practice to stop collection activity and abandon a debt when a particular nonpayment period expires is a defined policy."

Maybe it was coincidence that they canceled the debt right around the time that it rolled off my credit report.  Your creditors may have a different "decision or defined policy."  So basically, you may get a 1099-C at any time, even after the SOL has passed.