Asset Acceptance sent me 1099 for UN-validated debt

[scorebuilder]

AA never was able to validate an old CC debt that I forced them to remove from my CR. Today I received a 1099-c from them for this very same alleged debt. . I also initiated a complaint with FTC and BBB while I was waiting for validation. The complaint was resolved in my favor, and they even sent me a letter indicating they will instruct CRA to delete, which they did delete...This has got to be a violation for AA to now report this as "cancellation of debt" to IRS claiming I was liable for repayment on a debt they were unable to validate

 

What's my best course of action at this point? Send proof to IRS? Send ITS to AA?

[GEORGE]

AA never was able to validate an old CC debt that I forced them to remove from my CR. Today I received a 1099-c from them for this very same alleged debt. . I also initiated a complaint with FTC and BBB while I was waiting for validation. The complaint was resolved in my favor, and they even sent me a letter indicating they will instruct CRA to delete, which they did delete...This has got to be a violation for AA to now report this as "cancellation of debt" to IRS claiming I was liable for repayment on a debt they were unable to validate

 

What's my best course of action at this point? Send proof to IRS? Send ITS to AA?

SEND A COPY OF THE 1099-C WITH A LETTER TO THE IRS ASKING ABOUT IT

 

Attach a copy of the complaints filed with the FTC and BBB ("IN YOUR FAVOR")

 

...or see if there is any branch office of the IRS (near you) that allows walk-in questions

Edited February 8, 2010 by GEORGE

[cinnamngrl]

AA never was able to validate an old CC debt that I forced them to remove from my CR. Today I received a 1099-c from them for this very same alleged debt. . I also initiated a complaint with FTC and BBB while I was waiting for validation. The complaint was resolved in my favor, and they even sent me a letter indicating they will instruct CRA to delete, which they did delete...This has got to be a violation for AA to now report this as "cancellation of debt" to IRS claiming I was liable for repayment on a debt they were unable to validate

 

What's my best course of action at this point? Send proof to IRS? Send ITS to AA?

 

I would complain to the IRS and the AG's. It seems that they are trying to extort some money money out of you.

[scorebuilder]

?

SEND A COPY OF THE 1099-C WITH A LETTER TO THE IRS ASKING ABOUT IT

 

Attach a copy of the complaints filed with the FTC and BBB ("IN YOUR FAVOR")

 

...or see if there is any branch office of the IRS (near you) that allows walk-in questions

 

In addition, shouldn't I also contact AA with an ITS or at least a stern letter?

[My life is a mess]

Yes, a very stern letter to the CFO sent CMRRR, with a copy of it to the IRS, AG of your state, and AG Michigan, BBB of Warren MI, FTC, and the ACA.

 

I would include the following statement as my closing sentence in the letter.......

 

"How can matters which cannot be validated cannot also be considered as accurately reported as miscellaneous income to the IRS?"

[cinnamngrl]

I wouldn't threaten to sue AA until we know what exactly your damage is. Sending you 1099 doesn't make you file although of course it puts you at risk of being audited. But you can't let that happen.

 

I would report this to the IRS with form 3949a. I have used it against BofA before. Send AA a copy of it. this will be more scary than a its.

 

 

3949-A

 

 

How Do You Report Suspected Tax Fraud Activity?

 

 

If you suspect or know of an individual or company that is not complying with the tax laws, you may report this activity by completing Form 3949-A. You may fill out Form 3949-A online, print it and mail it to:

 

Internal Revenue Service

Fresno, CA 93888

 

See if you can make a similar report to your own state tax office

[My life is a mess]

OP,

First, what is your objective? Do you want to get the 1099C voided before AAC sends their information into the IRS on March 31, or do you want to bring legal action?

 

If you received an erroneous 1099C from any company other than a third party collection agency I would tell you to call the tax department at the issuing company to straighten this out. Since you are dealing with a known lawbreaking industry; write a letter, send it CMRRR.

 

Send a letter TODAY to Asset’s CFO, or VP of Tax, or both, explaining in detail why you believe you received this 1099C in error as stated in your post. It would be in your best interest to include copies of the letters you commented on in your OP. Send a strongly worded letter, stating you expect immediate resolution. As stated before, copy the IRS, the AG of MI, and your home state, the BBB of Warren, MI, the ACA and the FTC. Send a copy to the SEC also.

 

There is a reason for the waiting period between the time 1099’s are issued to recipients’ and time reported to the IRS. There is also a reason why 1099’s can be voided and/or reissued with different amounts, because the IRS realizes mistakes happen when 1099’s are issued. That being said,,,

 

Your window of opportunity to have this voided before AAC files a copy with the IRS is getting shorter with every passing day. I have over 10 years of corporate tax experience, emphasis in 1099 compliance as well as other regulatory compliance for a fortune 500 company. Every year I get calls from 2 days after mailing 1099's until people file their ammended taxes years later, and sometimes the person who calls to point out a mistake is correct. All valid disputes must be investigated, and AAC is a public company. However, the tax department does not know this debt could not be validated, hence the reason for a letter explaining the error. Before you spend money filing a legal action, give them a chance to fix the error.

 

In the meantime you can file the report with the IRS for tax fraud, heck; I wish everyone on CB would, but without something more than a 1099C erroneously issued your fraud alert is not going to be given much consideration by the IRS!

 

I wish the SEC and IRS would investigate AAC and shut them down forever.

 

Good luck; please call AAC or send a letter ASAP.

[fdj]

Similar topic here:

http://creditboards.com/forums/index.php?showtopic=426562

 

I'd complain to the IRS until the JDB gets smacked down.

 

I like cinn's idea of filing a fraud alert with the IRS. That'll get someone's attention.

[scorebuilder]

OP,

First, what is your objective? Do you want to get the 1099C voided before AAC sends their information into the IRS on March 31, or do you want to bring legal action?

 

Well, before this 1099 issue arose, I had considered legal action for continuing to report a chargeoff without validating the debt per sec 809 (. now I want to address and resolve the 1099 issue and have it voided before it's too late, while still considering legal action afterwards. Thanks for the advice.

[scorebuilder]

I wouldn't threaten to sue AA until we know what exactly your damage is. Sending you 1099 doesn't make you file although of course it puts you at risk of being audited. But you can't let that happen.

 

I would report this to the IRS with form 3949a. I have used it against BofA before. Send AA a copy of it. this will be more scary than a its.

 

 

3949-A

 

 

How Do You Report Suspected Tax Fraud Activity?

 

 

If you suspect or know of an individual or company that is not complying with the tax laws, you may report this activity by completing Form 3949-A. You may fill out Form 3949-A online, print it and mail it to:

 

Internal Revenue Service

Fresno, CA 93888

 

See if you can make a similar report to your own state tax office

 

 

Yes, I agree that this would be more scary and attention grabbing than an ITS ..Thanks a ton

[flacorps]

When you file your 1040 you must attach the 1099-c, however you might also attach an explanatory letter (with supporting documentation) for why you did not reflect the purported income on your tax return.

[cinnamngrl]

When you file your 1040 you must attach the 1099-c, however you might also attach an explanatory letter (with supporting documentation) for why you did not reflect the purported income on your tax return.

 

I don't think this will help you. You can't file it as it is fraudulent.

 

I would

 

1. Attempt to get them to withdraw the 1099 and get aletter saying it will not be filed (tough)

 

2. Ask tax attorney for advice.

 

Meanwhile file all available complaints

[flacorps]

2. Ask tax attorney for advice.

 

I am a tax attorney.

 

If something you're going to file falls outside the "usual" things that the IRS sees, you need to attach a letter explaining what you did along with supporting documentation if there is some and if it is not voluminous (say five or so pages would be OK for something like this--maybe your letter out to the JDB, your complaint letter to the BBB, a letter from the BBB saying they didn't respond, etc.).

 

The need to do that would pretty much rule out filing electronically.

[scorebuilder]

I will go ahead with complaints along with form 3949A to IRS anticipating/hoping this to get voided prior to filing my taxes. I just read that Mark Redman (CFO) resigned on Jan 8,2010. It does say he will continue as an officer until his replacement is found, so I guess I'm safe sending letter and copies of complaints to him.

 

Thanks to all for responses and advice.

 

Interesting sidebar...I called the number on 1099c which is a recording that says if you believe the 1099 notice is inaccurate to call a different number, which I discovered is their compliance dept .

[My life is a mess]

Stay off the phone with them!!! There is not one person who works there that you can trust to have an honest conversation with!!!!!! Like George always says, 100% of CA's lie 102% of the time.

 

If you are comfortable enough, you might provide your e-mail for any questions related to the 1099C....just not sure I would do that.....but you are in a somewhat shortened timeline here.....

[cinnamngrl]

2. Ask tax attorney for advice.

 

I am a tax attorney.

 

If something you're going to file falls outside the "usual" things that the IRS sees, you need to attach a letter explaining what you did along with supporting documentation if there is some and if it is not voluminous (say five or so pages would be OK for something like this--maybe your letter out to the JDB, your complaint letter to the BBB, a letter from the BBB saying they didn't respond, etc.).

 

The need to do that would pretty much rule out filing electronically.

 

So, if the consumer files there taxes with said letter, what can they expect?

[coopertwist]

A CP 2000 notice in the mail 6-12 months later. You can accept, partially accept or dispute in full with your evidence. Keep all correspondences with Asset. Make sure you have all your return receipts.

 

Easyist way is get the to correct it....also file the 3949A.

[sedric1]

do you mind sending me your complaint letters to the bbb and ftc? ironically enough i just sent one to them as well for asset (just last night), saying asset couldnt validate. im just curious if you had better arguments than i have

[flacorps]

I haven't linked to this article in a while because I haven't been able to find it in a while. But today I did:

http://www.ryancareycpa.com/Papers/Tickmar...20-%20Carey.pdf

[scorebuilder]

do you mind sending me your complaint letters to the bbb and ftc? ironically enough i just sent one to them as well for asset (just last night), saying asset couldnt validate. im just curious if you had better arguments than i have

 

That's basically what my complaint was. I indicated that Asset is continuing to report in violation and has ignored 2 requests to validate this alleged debt. I added if they do not cooperate, I will be forced to bring legal action, which i don't want to do.

 

Their reply was "We will remove the item permanently, as we are no longer able to provide documentation, although we believe it to be a valid debt"

[cinnamngrl]

I haven't linked to this article in a while because I haven't been able to find it in a while. But today I did:

http://www.ryancareycpa.com/Papers/Tickmar...20-%20Carey.pdf

 

 

But what do you think is going to happen to OP?

Edited February 10, 2010 by cinnamngrl

[flacorps]

I haven't linked to this article in a while because I haven't been able to find it in a while. But today I did:

http://www.ryancareycpa.com/Papers/Tickmar...20-%20Carey.pdf

 

 

But what do you think is going to happen to OP?

OP should first attempt to not take the 1099-c item into income.

 

Failing that file an amended 1040 with a 982 attached for whatever discount can be obtained.

[Gudziel]

Wow! Very Informing!!! I just got a 1099-C from AALLC over this past weekend. Problem is I've already filed electronically and expect my tax refund to be deposited this friday! So now what do I do since someone already mentioned above that receiving this and disputing it throws filing electronically out the window?

 

I disputed AALLC a while back and actually received a letter from them stating that after an internal investigation, they did not find any records of an account under my name. Then a few days later I get "validation" that pretty much everyone gets from them. After a nice complaint to ALL of the proper agencies, I received a letter from AALLC stating that even though they considered my debt legit, they were unable to get the proper paperwork for validation so all records of said debt were being removed.

 

Now I just got hit with this AFTER I filed my returns through Turbotax. Other than doing the following:

 

Send complete papertrail with form 3949A to the IRS

Send complete papertrail with copies of 1099-C/3949A to AG's, BBB, FTC, SEC

 

What else should I do? Am I in deeper because I've already filed before receiving the 1099-C???

 

Please help!!! I'm apparently running out of time!

[scorebuilder]

What else should I do? Am I in deeper because I've already filed before receiving the 1099-C???

 

Please help!!! I'm apparently running out of time!

 

 

I think you're fine for now. If the IRS challenges your figures, you always have an opportunity to appeal and explain to them your situation with the 1099c.

[Stryker]

What else should I do? Am I in deeper because I've already filed before receiving the 1099-C???

 

Please help!!! I'm apparently running out of time!

 

 

I think you're fine for now. If the IRS challenges your figures, you always have an opportunity to appeal and explain to them your situation with the 1099c.

 

ITA.

 

 

I wouldn't be too stressed. You can also file an amended return anyway. Flacorps has some good advice...