Just got 1099'd from ASSHAT

[brn5150]

This company is simply criminal. I paid a 6 year old "non-validated" debt in order to get a mortgage. I paid, less than 50% of this "alleged" debt. In the mail today I get a 1099 for the amount of $1,846. The original credit line on this account in 1993 was $2,000. I paid nearly that amount to ASSHAT to have this debt considered "settled in full".

 

The owners should be locked up for finding a way to abuse the system, and it's "customers" so badly. I swear if I saw Mr. Bradly or Mr. Beach right now, I would personally shove this document right up their A$$

 

SCUMBAGS!

 

Is there anything I can do to elimenate this? In my tax percentage, this works out to nearly $700!!!!!!!!!

[flacorps]

If you're insolvent for 2005, file a 982 form.

 

If not, write a letter and attach it to your 1040 stating that the 1099 should not be applied to your income because you compromised an account that was very much in dispute, paid $x on their claim of $y and the amount not paid was in the nature of a discount rather than forgiveness. It's worth a shot.

[BlueGhost]

Hmm..I'd ask A$$wipes to "explain" the amount forgiven by showing what they "PAID" for that debt.....

 

IF you paid them more then they paid for it..then nothing was "FORGIVEN" by them I'd say..esp as they prob bought it after it was written off...and thus that Company had already reaped the Tax benefits then..

 

VERY SHADY that is...

 

BG

[Shawnee]

Interesting since A$$et pays in the area of one quarter cent to three cents per dollar face value for the junk debts they buy.

 

A couple of weeks ago this subject came up and I explained that these 1099-C forms were a new racket for the JDBs. The bottom line here is A$$et is violating the tax code, since it is highly likely the amount you paid them was far more than they paid for the debt. Report them to the IRS, also contact the taxpayer advocate and explain the situation.

[brn5150]

If you're insolvent for 2005, file a 982 form.

 

If not, write a letter and attach it to your 1040 stating that the 1099 should not be applied to your income because you compromised an account that was very much in dispute, paid $x on their claim of $y and the amount not paid was in the nature of a discount rather than forgiveness. It's worth a shot.

 

Thanks for the heads-up. Unfortunately, insolvent is not an option. I will try the writing of a letter to the good ol IRS. They are nearly as bad as CA that bought a $2k debt for less than $200. No matter the case, I will take your suggestion and report the results.

 

TO ANYONE THINKING OF SETTLING A DEBT WITH A DIRTBAGE CA, TAKE WARNING OF THIS PRACTICE. I have read a little since my post and noticed that CA's are simply sending these out to keep in compliance with the IRS. There is no financial benefit to the CA to send these out. Honest, and I hate saying that. The CA however, does not necessarily need to report this. So try and get that in your agreement/settlement.

 

Funny, they could care less about our rights, but when it comes to Uncle Sam, they sure do comply.

[Shawnee]

If you're insolvent for 2005, file a 982 form.

 

If not, write a letter and attach it to your 1040 stating that the 1099 should not be applied to your income because you compromised an account that was very much in dispute, paid $x on their claim of $y and the amount not paid was in the nature of a discount rather than forgiveness. It's worth a shot.

 

Thanks for the heads-up. Unfortunately, insolvent is not an option. I will try the writing of a letter to the good ol IRS. They are nearly as bad as CA that bought a $2k debt for less than $200. No matter the case, I will take your suggestion and report the results.

 

TO ANYONE THINKING OF SETTLING A DEBT WITH A DIRTBAGE CA, TAKE WARNING OF THIS PRACTICE. I have read a little since my post and noticed that CA's are simply sending these out to keep in compliance with the IRS. There is no financial benefit to the CA to send these out. Honest, and I hate saying that. The CA however, does not necessarily need to report this. So try and get that in your agreement/settlement.

 

Funny, they could care less about our rights, but when it comes to Uncle Sam, they sure do comply.

 

They are not, they are breaking the law. They do benefit from these in that they are using the amounts reported on the 1099s to offset their tax liability. As with everything else A$$et does they are flagrantly violating the tax code.

[TomKC]

A couple of weeks ago this subject came up and I explained that these 1099-C forms were a new racket for the JDBs.

How exaclty do the JDB's make money by sending out 1099-C's?

[BlueGhost]

A couple of weeks ago this subject came up and I explained that these 1099-C forms were a new racket for the JDBs.

How exaclty do the JDB's make money by sending out 1099-C's?

 

 

By keeping tax dollars that should be paid by them thus ripping off the American Tax Paying Public....

 

Example:

They buy a 4K written off debt for 100.00 and mark it up to 10K via their fees, interest etc they claim U owe them...

 

Dunn the crap outta ya, then settle for 3K.

 

They "write" off 7K to the goverment to go as a credit against earnings and make you pay the difference as taxes on forgiven debt..all ofr a debt they paid 100.00 on....

 

A deffinite TAX scam/fruad if I ever heard of one...

 

Real nice of them hu?

 

BG

[Shawnee]

I just called a CPA I've worked with in the past. Since I'm not currently a paying customer, I kept the question very simple.

 

Q: A company purchases a debt with a face value of $1000 for $30. The company settles the account with the debtor for $200. Can the company file a 1099-C listing the amount as $800?

 

A: No. A 1099-C represents a loss or tax write off. In this case the company had a net profit of $170 so they can not file a 1099-C. They incurred no loss.

Edited February 7, 2006 by Shawnee

[ffemtreed]

Hmm.... if I tell my tenants I want 2000 dollars rent a month but settle with them for say 500 dollars a month I can deduct 1500 a month from my taxs by filing a 1099c..... hmm very interesting

[flacorps]

I won't go into detail here, but the key is the "contested liability doctrine" and the Zarin and Sobel cases.

 

http://www.findarticles.com/p/articles/mi_...i_n9364131/pg_2

 

Folks, it's important what you put in letter offering settlement, and what you write on checks tendering settlement if you want to be able to attach something in the way of a letter to the IRS, a copy of a letter to a JDB and/or a copy of a canceled check with an appropriate notation in the "memo" field so that the effect of a 1099-c is parried and you don't have to take it into income, insolvency notwithstanding.