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Old member returns with a baffler... IRS, alleged 1099-C and a repo over a decade old.


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Yup, I returned, because there is no better resource I can think of for this question. I received a letter form the IRS today saying I owe them over $1,000 for 2012 due to under reported income. I was allegedly 1099'd in 2012 by Americredit from a repo in early 2002 for $6,987, although I never received any notices. The SOL in VA (where the loan was initiated) for this loan should have been 6 years, the DOFD, IIRC, was December 2001, and the car was auctioned, once again, IIRC, in May 2002. I am not positive as to when it was charged off, but I am pretty sure that occurred in 2002 as well.

Is there a limit as to how long they can wait to send a 1099? If no 1099 was sent to my current address in TX, is there any recourse? How should I proceed?

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I cannot claim insolvency as I started a business that year, made over $45K at my full-time job and pulled in over $15K from the new business. I eventually grew that business beyond my abilities to run full-time without help and sold everything off this year.

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I found an old Credit report on a hard drive from 2007 that shows Americredit having been in a "Charged Off" status back then. From what I understand, they cannot 1099-c a debt they charged off years prior, only a debt they forgave during that tax year.

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I actually had already seen the case referenced in that summary judgement and included it in my statement required by the memo to return to the IRS in lieu of payment. I whipped this out pretty quickly, anything else you think I should add/remove? After all, I am a bit rusty.

 

Department of the Treasury
Internal Revenue Service
1973 N Rulon White Blvd
Ogden, UT 84201-0021
STATEMENT OF FACTS
RE: AUR CONTROL NUMBER XXXXXXXXX
I am writing this statement of facts RE: AUR CONTROL NUMBER XXXXXXXXX in order to present the facts and evidence surrounding the alleged 1099-C as claimed by Americredit Financial Services Inc. of Fort Worth, TX (henceforth called Americredit in this document) in order to fraudulently lower their corporate tax liability in the year 2012. It will present affirmative defenses which shall prove, beyond a shadow of a doubt, that this action was not only fraudulent, but that the issuance of the 1099-C was in violation of 26 CFR 1.6050P-1( B)(2)(iii) and 26 CFR 1.6050P-1( B)(2)(iv). The taxpayer, DRTDEVL, never received a 1099-C from Americredit for 2012 or any other tax year. This 1099-C was first known today, the date of receipt of the enclosed notice from the IRS. Had the taxpayer known that this 1099-C had been generated for the tax year 2012, or any other tax year after 2002, he would have diligently reported the fraud to the IRS.
According to the enclosed Experian Credit Report from August 2007 (Report number XXXXXXXXXX), account number XXXXXXXXX was charged off by Americredit in May 2002. According to 26 CFR 1.6050P-1( B)(2)(iii), this debt should have resulted in a 1099-C for the tax year 2002 pursuant to CFR 1.6050P-1( B)(2)(i)(G).
Had this action not occurred in 2002, the 1099-C would have been required to have been issued for the tax year 2005 pursuant to 26 CFR 1.6050P-1( B)(2)(iv) as interpreted by the US Tax Court in Kleber v. Commissioner (T.C. Memo. 2011-233) due to the absence of any identifiable event (aside from the evidence showing the identifiable event occurring in 2002).
As you can clearly see, the filing of debt forgiveness by Americredit was little more than an attempt to defraud the United States Government by overstating losses in the year 2012. I would suggest looking further into this matter to see how far the case of issuing fraudulent 1099-Cs may reach. Once it is decided that this debt forgiveness should have been reported in 2002 or 2005, I wish to make note that the cancellation of this debt would have occurred in a year on which the statute of limitations for assessment of additional tax has run, precluding any additional tax liability pursuant to 26 U.S.C. § 6501(a). As such, I will not be enclosing any payment at this time.
Thank you for your consideration,



DRTDEVL

 

 

Edited by DRTDEVL
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did you already send it?

 

I would leave out the fraud part; attempts at collection can extend that 3 year requirement.

 

A decision by a creditor to discontinue collection activity may require that creditor to issue a Form 1099-C. Sec. 1.6050P-1(B)(2)(i)(G), Income Tax Regs.

 

you should state that no attempts for collection was made since _____________ and that it would appear that this debt was discharged in 2005, three years after the charge off occured in 2002, when it was clear that the debt would not be repaid

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I actually had already seen the case referenced in that summary judgement and included it in my statement required by the memo to return to the IRS in lieu of payment. I whipped this out pretty quickly, anything else you think I should add/remove? After all, I am a bit rusty.

 

 

Department of the Treasury
Internal Revenue Service
1973 N Rulon White Blvd
Ogden, UT 84201-0021
STATEMENT OF FACTS
RE: AUR CONTROL NUMBER XXXXXXXXX
I am writing this statement of facts RE: AUR CONTROL NUMBER XXXXXXXXX in order to present the facts and evidence surrounding the alleged 1099-C as claimed by Americredit Financial Services Inc. of Fort Worth, TX (henceforth called Americredit in this document) in order to fraudulently lower their corporate tax liability in the year 2012. It will present affirmative defenses which shall prove, beyond a shadow of a doubt, that this action was not only fraudulent, but that the issuance of the 1099-C was in violation of 26 CFR 1.6050P-1( B)(2)(iii) and 26 CFR 1.6050P-1( B)(2)(iv). The taxpayer, DRTDEVL, never received a 1099-C from Americredit for 2012 or any other tax year. This 1099-C was first known today, the date of receipt of the enclosed notice from the IRS. Had the taxpayer known that this 1099-C had been generated for the tax year 2012, or any other tax year after 2002, he would have diligently reported the fraud to the IRS.
According to the enclosed Experian Credit Report from August 2007 (Report number XXXXXXXXXX), account number XXXXXXXXX was charged off by Americredit in May 2002. According to 26 CFR 1.6050P-1( B)(2)(iii), this debt should have resulted in a 1099-C for the tax year 2002 pursuant to CFR 1.6050P-1( B)(2)(i)(G).
Had this action not occurred in 2002, the 1099-C would have been required to have been issued for the tax year 2005 pursuant to 26 CFR 1.6050P-1( B)(2)(iv) as interpreted by the US Tax Court in Kleber v. Commissioner (T.C. Memo. 2011-233) due to the absence of any identifiable event (aside from the evidence showing the identifiable event occurring in 2002).
As you can clearly see, the filing of debt forgiveness by Americredit was little more than an attempt to defraud the United States Government by overstating losses in the year 2012. I would suggest looking further into this matter to see how far the case of issuing fraudulent 1099-Cs may reach. Once it is decided that this debt forgiveness should have been reported in 2002 or 2005, I wish to make note that the cancellation of this debt would have occurred in a year on which the statute of limitations for assessment of additional tax has run, precluding any additional tax liability pursuant to 26 U.S.C. § 6501(a). As such, I will not be enclosing any payment at this time.
Thank you for your consideration,

 

 

 

DRTDEVL

 

 

 

 

I wouldn't send this.

 

 

Your belief that a charge-off triggers a 1099-C is wrong. Further, if you read the IRS regulations even merely having the unpaid debt exceed the state's legal SOL for time-barred debt does not allow 1099-C. The claim of an attempt to "Defraud the US Government" by the late filing does not make sense to me.

 

I would also drop the legalistic jargon until you know the law cold.

Edited by cashnocredit
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Aside from a letter I received in 2002 informing me of the sale at auction and a few calls in the months immediately after the repo, there has been no collection activity on the account. No calls, no letters, not a peep out of them. This would place the 1099-C in either 2002 or 2005, depending on how the law is interpreted, but definitely not in 2012.

The fraud is in claiming a loss of $6,000 in 2012 that did not exist according to the law. I am willing to bet that Americredit filed hundreds, if not thousands, of seriously delinquent 1099-Cs in 2012 that were not losses during that year (or even within 5 years) in order to eliminate most, if not all, of their tax liability.



I definitely want to go for their throat. This was not your normal repo, the story was that the contract was sold to Americredit after its inception. Americredit gladly took the payments, but they never got the MSO from the dealer or the original account holder. My registration was revoked 90 days after the sale until the MSO was produced... and numerous 45 day extensions were granted to allow me to drive the vehicle upon appearance in person at the main DMV HQ in the state capitol. After a year, the DMV could not extend me any further and I was forced to stop paying for a car that I could not drive due to Americredit not following up with the title paperwork. Once the car was finally repossessed, I got a call from the DMV HQ. My case worker informed me two weeks after the repo that the title had finally been filed for (in order to sell the car at auction) and that I could have my registration reinstated by paying the renewal fee. The car was auctioned 14 months after purchase in what had to be a rigged event as the letter claimed to have only been paid $3000 for it (I'd like to find a car auction out there where you can find a 14 month old car in perfect shape for $3000, no matter the brand).

Anyway, I typed this response up about 5 hours ago. I was swapping RV spots and have been sunk in the mud to my axle all afternoon trying to dig out. I'll probably revisit this later on this evening.

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Aside from a letter I received in 2002 informing me of the sale at auction and a few calls in the months immediately after the repo, there has been no collection activity on the account. No calls, no letters, not a peep out of them. This would place the 1099-C in either 2002 or 2005, depending on how the law is interpreted, but definitely not in 2012.

 

The fraud is in claiming a loss of $6,000 in 2012 that did not exist according to the law. I am willing to bet that Americredit filed hundreds, if not thousands, of seriously delinquent 1099-Cs in 2012 that were not losses during that year (or even within 5 years) in order to eliminate most, if not all, of their tax liability.

 

 

 

I definitely want to go for their throat. This was not your normal repo, the story was that the contract was sold to Americredit after its inception. Americredit gladly took the payments, but they never got the MSO from the dealer or the original account holder. My registration was revoked 90 days after the sale until the MSO was produced... and numerous 45 day extensions were granted to allow me to drive the vehicle upon appearance in person at the main DMV HQ in the state capitol. After a year, the DMV could not extend me any further and I was forced to stop paying for a car that I could not drive due to Americredit not following up with the title paperwork. Once the car was finally repossessed, I got a call from the DMV HQ. My case worker informed me two weeks after the repo that the title had finally been filed for (in order to sell the car at auction) and that I could have my registration reinstated by paying the renewal fee. The car was auctioned 14 months after purchase in what had to be a rigged event as the letter claimed to have only been paid $3000 for it (I'd like to find a car auction out there where you can find a 14 month old car in perfect shape for $3000, no matter the brand).

 

Anyway, I typed this response up about 5 hours ago. I was swapping RV spots and have been sunk in the mud to my axle all afternoon trying to dig out. I'll probably revisit this later on this evening.

 

You may have an argument about the age of the debt the 1099-C was issued for. That has a good shot. But not the "fraud" argument and making it won't help your case with the IRS.

 

The IRS is the one that has caused a lot of these old debts to be 1099-C'ed. Many companies were not filing them in a timely manner, largely because there was no benefit to the company. So the IRS started going after companies that had not filed 1099-Cs when the were supposed to and forced them to do so to avoid penalties. The IRS looks at this as "income" and tax revenues they hadn't received so they are going after the consumer to get that tax. But the have to force the companies to issue 1099Cs before they ding the consumers. All the deductions for the loss on the debt were taken back when the debt was charged off and the 1099-C is not and cannot be used to claim another loss years later.

 

My concern is that by claiming fraud you will hurt your legitimate age case with the IRS.

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Aside from a letter I received in 2002 informing me of the sale at auction and a few calls in the months immediately after the repo, there has been no collection activity on the account. No calls, no letters, not a peep out of them. This would place the 1099-C in either 2002 or 2005, depending on how the law is interpreted, but definitely not in 2012.

 

The fraud is in claiming a loss of $6,000 in 2012 that did not exist according to the law. I am willing to bet that Americredit filed hundreds, if not thousands, of seriously delinquent 1099-Cs in 2012 that were not losses during that year (or even within 5 years) in order to eliminate most, if not all, of their tax liability.

 

 

 

I definitely want to go for their throat. This was not your normal repo, the story was that the contract was sold to Americredit after its inception. Americredit gladly took the payments, but they never got the MSO from the dealer or the original account holder. My registration was revoked 90 days after the sale until the MSO was produced... and numerous 45 day extensions were granted to allow me to drive the vehicle upon appearance in person at the main DMV HQ in the state capitol. After a year, the DMV could not extend me any further and I was forced to stop paying for a car that I could not drive due to Americredit not following up with the title paperwork. Once the car was finally repossessed, I got a call from the DMV HQ. My case worker informed me two weeks after the repo that the title had finally been filed for (in order to sell the car at auction) and that I could have my registration reinstated by paying the renewal fee. The car was auctioned 14 months after purchase in what had to be a rigged event as the letter claimed to have only been paid $3000 for it (I'd like to find a car auction out there where you can find a 14 month old car in perfect shape for $3000, no matter the brand).

 

Anyway, I typed this response up about 5 hours ago. I was swapping RV spots and have been sunk in the mud to my axle all afternoon trying to dig out. I'll probably revisit this later on this evening.

 

You may have an argument about the age of the debt the 1099-C was issued for. That has a good shot. But not the "fraud" argument and making it won't help your case with the IRS.

 

The IRS is the one that has caused a lot of these old debts to be 1099-C'ed. Many companies were not filing them in a timely manner, largely because there was no benefit to the company. So the IRS started going after companies that had not filed 1099-Cs when the were supposed to and forced them to do so to avoid penalties. The IRS looks at this as "income" and tax revenues they hadn't received so they are going after the consumer to get that tax. But the have to force the companies to issue 1099Cs before they ding the consumers. All the deductions for the loss on the debt were taken back when the debt was charged off and the 1099-C is not and cannot be used to claim another loss years later.

 

My concern is that by claiming fraud you will hurt your legitimate age case with the IRS.

 

+ 1000%

 

if you wanted to go after fraud, you should have done it back during the repo stage - there was a case like yours a few years back.

guy had the car, but the bank couldn't find the loan to apply the payments too - repeatedly telling a borrower he had a zero balance on an auto loan, and then hitting him with an accelerated loan amount, late fees and penalties and reporting the delinquent loan to credit reporting agencies without mentioning the dispute.

 

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  • 3 weeks later...

I agree with everything above. I was POed, obviously, and went off the deep end. Been busy as heck up here in the Oil Fields, I finally typed a new letter out this evening. This is what is heading to the IRS Monday.

 

Department of the Treasury

Internal Revenue Service
1973 N Rulon White Blvd
Ogden, UT 84201-0021
STATEMENT OF FACTS
RE: AUR CONTROL NUMBER XXXXXXXXX
I am writing this statement of facts RE: AUR CONTROL NUMBER XXXXXXXXX in order to present the facts and evidence surrounding the alleged 1099-C as claimed by Americredit Financial Services Inc. of Fort Worth, TX (henceforth called Americredit in this document) in the year 2012. The issuance of this 1099-C was in violation of 26 CFR 1.6050P-1( B)(2)(iii) and 26 CFR 1.6050P-1( B)(2)(iv). The taxpayer, DRTDEVL, never received a 1099-C from Americredit for 2012 or any other tax year. This 1099-C was first known on June 28th, 2014, the date of receipt of notice from the IRS. Had the taxpayer known that this 1099-C had been generated for the tax year 2012, or any other tax year after 2002, he would have diligently reported the inaccuracy to the IRS.
According to the enclosed excerpt of an Experian Credit Report from August 2007 (Report number XXXXXXXXXX), account number XXXXXXXXX was charged off by Americredit in May 2002. According to 26 CFR 1.6050P-1( B)(2)(iii), this debt should have resulted in a 1099-C for the tax year 2002 pursuant to CFR 1.6050P-1( B)(2)(i)(G), as it was the last identifiable event.
Had this action not occurred in 2002, the 1099-C would have been required to have been issued for the tax year 2005 pursuant to 26 CFR 1.6050P-1( B)(2)(iv) as interpreted by the US Tax Court in Kleber v. Commissioner (T.C. Memo. 2011-233) due to the absence of any identifiable event (aside from the evidence showing the identifiable event occurring in 2002).
Americredit has not made any known attempts to contact the taxpayer in over a decade. The last recollected attempt was by a USPS mailing in June 2002. There has been no significant, bona-fide collection activity on this account in over a decade. If accurate, this once again confirms that the last identifiable event occurred in 2002.
As you can clearly see, the filing of the 1099-C by Americredit in 2012 was well outside the 36-month test window as provided in CFR 1.6050P-1( B)(2)(iv). The Taxpayer had no Cancellation of Debt Income in the year 2012 as a result of over a decade of inaction by Americredit.
Thank you for your consideration,
DRTDEVL
Edited by DRTDEVL
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Personally, I've found the IRS easy to work with. They have a tough job and most of their "customers" aren't in the best of moods so if you are just professional with them they tend to respond in kind. I actually had one of them go out of their way to help me when I was getting my act together after many years of not filing.

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