Disputed with CA and received a 1099-C.

[no100player]

I received a dunning letter TWO YEARS ago and disputed it within the 30 days window. The account is WAY past SOL in California.

 

After receiving the normal BS validation, I sent the CA another letter and they replied stating that they'll notate on CR's that its disputed (at the time it was no longer on the CR's).

 

Earlier last year, the CA hired another CA to collect for them. I disputed with the new CA while informing them of the previous dispute with their boss CA. I also sent a strongly worded letter to their boss CA (original CA) informing them of their violation. The original CA then sent me a letter similar to the one above (we'll notate it as disputed and report).

 

A month later I get a letter in the mail stating that the debt has been closed in their offices and that nothing was reporting to the CRA's.

 

Fast forward to this year, checked the mail only to find a 1099-C in it.

 

So then, is this legal? After all, they never validated the debt.

 

Also, the amount shown on the 1099-C is way more than what the CA was offering to "Settle" for in the many settlement letters they were sending me.

 

Thanks.

Edited February 5, 2010 by no100player

[x-large debt]

Hmm. Someone is puffing their losses how come am not surprised that a CA would do that...

 

well in order for you to have income on say $1000 of forgiven debt someone else is reporting this as a write-off on the same amount $1000. What is interesting is if this is JDB, the probably paid $10 for it (so they should be reporting a $10 investment loss). What is even more interesting is that the original creditor probably took a loss on the $1000-$10 paid by JDB years ago. So in essence two different people claiming the same loss in two different years. How cute.

 

Since this is the IRS I would just pay your share of taxes on it (if you overpay you get it returned next year). But write them a little letter explaining how these people double dipped on a loss... make the IRS audit them.

[jtoast]

Contact the IRS or a CPA/Tax attorney to see how to dispute a 1099c.

[GEORGE]

Hmm. Someone is puffing their losses how come am not surprised that a CA would do that...

 

well in order for you to have income on say $1000 of forgiven debt someone else is reporting this as a write-off on the same amount $1000. What is interesting is if this is JDB, the probably paid $10 for it (so they should be reporting a $10 investment loss). What is even more interesting is that the original creditor probably took a loss on the $1000-$10 paid by JDB years ago. So in essence two different people claiming the same loss in two different years. How cute.

 

Since this is the IRS I would just pay your share of taxes on it (if you overpay you get it returned next year). But write them a little letter explaining how these people double dipped on a loss... make the IRS audit them.

Let me get this right...they pay $10 for the debt AND write off $1,000 loss and give you a 1099-C for $1,000

 

Pretty good scam

[x-large debt]

1099's from a JDB I would not be surprised one bit

[no100player]

Here's some additional information. I disputed this with my State AG, and the CA replied to them (AG), who then forwarded the response to me. The CA informed the AG and myself that; "in the interest of resolving this matter, and due to the highly disputed nature of this account, it is the decision of XXX to close the file and cease all collection activity."

 

So with the CA stating the above, which in my opinion proves that they cannot prove I owe the debt, can I use this against them in regards to the 1099-C? After all, the CA claimed to "Cancel" the debt a month after sending this letter to my state Attorney General.

 

Edit: Their attorney (the CA) also stated in the letter/reply that they would remove all tradelines. With them stating that they would remove the trade lines (even though they were no longer on my CRA reports), would this be further proof that the debt isn't mine?

Edited February 6, 2010 by no100player

[jtoast]

Doubt it. I would contact the IRS and ask what the process was to dispute a 1099c

[no100player]

Doubt it. I would contact the IRS and ask what the process was to dispute a 1099c

 

How come it wouldn't help? Just curious.

 

Well at least West Virginians have it better due to their Attorney General's comments. Too bad about my state

[crow]

See here. If you were originally dunned for debt that was in fact yours, the CA can issue a 1099-C, even if there were violations along the way.

[no100player]

See here. If you were originally dunned for debt that was in fact yours, the CA can issue a 1099-C, even if there were violations along the way.

 

Reread that. I guess I'm lost because the CA still could not prove the debt was mine and even stated they would remove the TL's from my report.

 

To put it simply, why would the CA's inform my AG office that they are going to remove the TL's if the debt was valid, even though they're gonna report someone else's debt to the IRS on my behalf?

[havepeace]

Is there an SOL for a CA issuing a valid 1099-C? Or can they issue them years down the road?

[no100player]

Is there an SOL for a CA issuing a valid 1099-C? Or can they issue them years down the road?

 

Dunno, still trying to find it.

 

However, I did read an interesting piece of case law linked below. Can anyone break it down or tell me if it can be used in my situation?

 

http://taxlaw.typepad.com/files/mccormick.tcm.wpd.pdf

[My life is a mess]

OP,

 

The case you linked does, and does not, apply to a situation like yours. First, that case is against the IRS, not the OC, and in this case the 1099C was issued by the OC, not a third party collector. However, the decision includes some good verbiage. Depending on the amount indicated on the 1099c you may want to consult with a CPA.

 

If I were in your position, I would immediately send a letter to the CFO of the CA that issued the 1099C DEMANDING legal evidentiary material proving the debt was yours, and showing how the amount was calculated.

 

I would indicate on the letter that the FTC, the AG of you state and the CA's state, the BBB, the IRS and that association many of the collection agencies are members of, ACA maybe, were copied. I always list the Copied parties and corresponding CMRRR #'s at the top of all letters I send to legal or executives because I want them to be able to go to USPS.com and see when my letters where signed for at the various agencies!!!!! I know this will cost some postage, but definately will be worth it. Include copies of the correspondence you received when they deleted the account(s) with every letter.

 

The CA can void the 1099C, and that is your goal here, not to go to court against the IRS. Make your letter strong, and openly question how the CA can possibly issue you a 1099C for debt that was never proven to be yours.

 

Let us know what you do. Take immediate action, on your own, or with a CPA/Tax attorney.

 

GOOD LUCK!!!

[fdj]

Wait a minute.

 

Pretend this was a case of the JDB dunning the wrong person, realizing their mistake, deleting the entries from the CRAs, acknowledging to the state AG they could not verify the debt and then turning around and claiming they paid this "wrong" person an amount equivalent to the debt they claimed was owed.

 

That's essentially what we have here. Only the OP and the OC knows if this was a legitimate debt. The JDB "wrote off" a debt but failed to prove who owed it. It sure as hell seems like tax fraud for them to claim it was the OP when they were not able to substantiate the debt when challenged.

 

If I was the OP I'd never stop complaining to the IRS until the JDB got nailed to the wall.

[no100player]

Wait a minute.

 

Pretend this was a case of the JDB dunning the wrong person, realizing their mistake, deleting the entries from the CRAs, acknowledging to the state AG they could not verify the debt and then turning around and claiming they paid this "wrong" person an amount equivalent to the debt they claimed was owed.

 

That's essentially what we have here. Only the OP and the OC knows if this was a legitimate debt. The JDB "wrote off" a debt but failed to prove who owed it. It sure as hell seems like tax fraud for them to claim it was the OP when they were not able to substantiate the debt when challenged.

 

If I was the OP I'd never stop complaining to the IRS until the JDB got nailed to the wall.

 

Exactly! And that is what I'm going to do. All those years of disputing and nothing could be proved, sheesh, I honestly don't know if I owe(ed) it or not! I always thought the main purpose of the FDCPA was to protect individuals against wrongful accusation.

 

I guess most of the answers from this thread from this website were from CA employees.

[fdj]

Wait a minute.

 

Pretend this was a case of the JDB dunning the wrong person, realizing their mistake, deleting the entries from the CRAs, acknowledging to the state AG they could not verify the debt and then turning around and claiming they paid this "wrong" person an amount equivalent to the debt they claimed was owed.

 

That's essentially what we have here. Only the OP and the OC knows if this was a legitimate debt. The JDB "wrote off" a debt but failed to prove who owed it. It sure as hell seems like tax fraud for them to claim it was the OP when they were not able to substantiate the debt when challenged.

 

If I was the OP I'd never stop complaining to the IRS until the JDB got nailed to the wall.

 

Exactly! And that is what I'm going to do. All those years of disputing and nothing could be proved, sheesh, I honestly don't know if I owe(ed) it or not! I always thought the main purpose of the FDCPA was to protect individuals against wrongful accusation.

 

I guess most of the answers from this thread from this website were from CA employees.

Naa, I don't think that for a minute. I just think it's more significant than people realize.

[no100player]

Wait a minute.

 

Pretend this was a case of the JDB dunning the wrong person, realizing their mistake, deleting the entries from the CRAs, acknowledging to the state AG they could not verify the debt and then turning around and claiming they paid this "wrong" person an amount equivalent to the debt they claimed was owed.

 

That's essentially what we have here. Only the OP and the OC knows if this was a legitimate debt. The JDB "wrote off" a debt but failed to prove who owed it. It sure as hell seems like tax fraud for them to claim it was the OP when they were not able to substantiate the debt when challenged.

 

If I was the OP I'd never stop complaining to the IRS until the JDB got nailed to the wall.

 

Exactly! And that is what I'm going to do. All those years of disputing and nothing could be proved, sheesh, I honestly don't know if I owe(ed) it or not! I always thought the main purpose of the FDCPA was to protect individuals against wrongful accusation.

 

I guess most of the answers from this thread from this website were from CA employees.

Naa, I don't think that for a minute. I just think it's more significant than people realize.

 

Yeah you're right. A moment of the Monday Blues.

[no100player]

Anyone,

 

Would my situation fall under the "Disputed Debt Doctrine"?

[mjk3040]

I would definitely try and dispute that 1099 with the IRS as others have suggested, but...

 

Just in case you didn't know, you can file a Form 982 to declare insolvency if your current debts (mortgage, student loans, car loans, collections, credit cards, etc) are greater than your assets (home equity, savings, etc). You don't have to pay taxes on discharged debts if you were insolvent at the time of discharge.

[no100player]

I've been typing up a dispute to the alleged debt with the IRS. I did find a great (I think) opinion from the Dept. of Treasury that can help myself and others. Especially as there was no statement or anything with the 1099-C.

 

"You represented that typically a lender or debt-seller does not provide a breakdown of a delinquent debt into principal, interest, penalties, or other amounts, and the debt-buyer typically purchases the delinquent debt in a lump sum amount. As a result, an

organization that buys debt may not be able to provide the most complete information on Form 1099-C, “Cancellation of Debt,†and certain industry representatives believe that the debt-buying/collecting industry may face the threat of litigation under the FDCPA for providing false or misleading information. See 15 U.S.C. section 1692k.

 

In a lending transaction, an applicable entity is not required to report amounts other than stated principal. See section 1.6050P-1(d)(3) of the regulations. The aggregate amount of cancelled debt reported in Box 2 on Form 1099-C may include stated principal, fees, stated interest, penalties, or other amounts, but any amount of interest that is included in Box 2 should be separately reported in Box 3.

An organization that buys delinquent debt for a lump sum, however, may not know and cannot obtain the breakdown of the amount owed into principal, fees, interest, etc. As we mentioned to you, if the buyer cancels the debt in such a case, the buyer might consider including, along with the Form 1099-C that is furnished to the debtor, a notification that the amounts reported on the Forms 1099-C are based on the best available information and that Box 2 may include interest that is not reported in Box 3 but that would have been so reported if more complete information had been available. We note that 15 U.S.C. section 1692k© of the FDCPA provides that a debt collector may not be held liable in any action if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such

error."

 

http://www.brokencredit.com/wp-content/upl...Debt-Buyers.pdf

Edited February 9, 2010 by no100player

[My life is a mess]

Good article, but as I remember, the 3rd party collection agency did not establish that the debt was yours. This is the area where you can get this 1099C voided, IMHO.

 

Earlier today I posted a suggestion to another guy in the same situation with Asset, I don't know how to link the messages.

 

This morning I chose not to post my coments in your link because you indicated last night that I must work for a CA. I do not work for a CA, never have worked in collections, and never will. My experience in Corporate tax departments includes many hours of 1099 training, hundreds of hours of preparing and reviewing 1099's issued by a public company, hundreds of hours of reviewing tax law to ensure compliance.

 

Writing a letter to the CA suggesting they issued the 1099C as an error might make all of this go away, and if it was a bona fide error and you did not try to solve it with the issuer, the courts will not look highly upon this.

 

Try to get the 1099C voided with the CA, then focus on reporting tax fraud with the IRS.

[no100player]

Good article, but as I remember, the 3rd party collection agency did not establish that the debt was yours. This is the area where you can get this 1099C voided, IMHO. (Too True!)

 

This morning I chose not to post my coments in your link because you indicated last night that I must work for a CA. (Understandable, just a rant)

 

Writing a letter to the CA suggesting they issued the 1099C as an error might make all of this go away, and if it was a bona fide error and you did not try to solve it with the issuer, the courts will not look highly upon this.

 

Try to get the 1099C voided with the CA, then focus on reporting tax fraud with the IRS.

 

I'm typing up a letter to the CA, I'll leave it to them to make the next move.

 

Thanks again.

[My life is a mess]

Hi, thanks for expressing it was just a rant.

 

 

If you want to post your letter before sending we will be happy to continue to give you our opinions, and expertise in what may or may not work.....be specific, give details, don't worry if the letter is too long, they need to understand why they issued the 1099C to the wrong person.

[no100player]

Hi, thanks for expressing it was just a rant.

 

 

If you want to post your letter before sending we will be happy to continue to give you our opinions, and expertise in what may or may not work.....be specific, give details, don't worry if the letter is too long, they need to understand why they issued the 1099C to the wrong person.

 

No problem.

 

I'm a very specific person and like my letter. Its full of facts, no BS, but at the same time totally inappropriate to past online as it could come back to haunt me, know what I mean?

 

Thanks again.

 

And to others, as FDJ stated about this issue; " I just think it's more significant than people realize." I hope others will realize that too!

[My life is a mess]

Good Luck! If you send the letter to the CFO or Tax VP I expect you will get a response immediately. You might offer to let them contact you by e-mail if they have questions. JMO, because they must file their return with the IRS no later than 3/31/2010, BUT they can file with the IRS today if they feel their files are accurate.

 

You are correct, this is a huge issue. Alerting the IRS to the potential tax fraud they are committing is always a good idea, but getting the CA to void the 1099C should be the recipients first priority.

 

They were reporting 2 fraudulent accounts against me totalling over $70k that they ended up sending the same ole letter saying they think the accounts are bona fide, but deleted anyway. I have not received a 1099C from them, and I am not expecting one, but who knows what might come in next years mail. I would eat them for breakfast and spit them back out in the parking lot if that happens!