Received 1099-C From Portfolio Recovery

[Watson1225]

I just received a 1099-C from our friends at Portolio Recovery. The debt was originally incurred back in 1992 whe I was married. The form has my social but the name is one I never legally used. I NEVER had my social changed when I was married..it was and always has been in my maiden name. Is this legal???? They claim they wrote this off on 12/7/10. Can they just willy nilly send these things to the IRS? They do have the box checked that I was not personally liable for the repayment of the debt. If I was not liable to pay the debt why the hell should I have to report this as income? Please help.

[arrow0912]

Is this a real 1099c or a look-alike form? I would call the IRS to verify.

 

Do you remember this debt and who the OC was?

 

I just received a 1099-C from our friends at Portolio Recovery. The debt was originally incurred back in 1992 whe I was married. The form has my social but the name is one I never legally used. I NEVER had my social changed when I was married..it was and always has been in my maiden name. Is this legal???? They claim they wrote this off on 12/7/10. Can they just willy nilly send these things to the IRS? They do have the box checked that I was not personally liable for the repayment of the debt. If I was not liable to pay the debt why the hell should I have to report this as income? Please help.

[arrow0912]

See here: http://www.robertsandholland.com/content/532article.pdf a good article and opinion.\ on this very subject.

 

I just received a 1099-C from our friends at Portolio Recovery. The debt was originally incurred back in 1992 whe I was married. The form has my social but the name is one I never legally used. I NEVER had my social changed when I was married..it was and always has been in my maiden name. Is this legal???? They claim they wrote this off on 12/7/10. Can they just willy nilly send these things to the IRS? They do have the box checked that I was not personally liable for the repayment of the debt. If I was not liable to pay the debt why the hell should I have to report this as income? Please help.

[Watson1225]

Is this a real 1099c or a look-alike form? I would call the IRS to verify.

 

Do you remember this debt and who the OC was?

 

 

I never received one before so I have no idea what a real one vs. a fake one would look like. I AM NOT calling the IRS on this. The debt is for $5057.12 for Chase Manhattan Bank visa (they have not gone by that name for atleast 15 years or so). We may have had a credit card with them, but I have not spoken to my ex husband since 1992 when we divorced so not sure. The creditor name is Portfolio Recovery. I never had an account with them. I have no intention of paying this. Should I contact the NY Attorney General's office and file a complaint? Portfolio layed off calling me when they found out my sole income was Social Security Disablity.

[arrow0912]

If you got a 1099c they are forgiving the debt. But is the debt theirs to forgive? Portfolio Recovery is a debt collection agency.

 

The 1099c reports the amount of the debt as income to the IRS. What they did in effect is make you laible for the taxes on that amount. Ready the article I linked to another post in your thread. Looks like you are stuck here. The SOL is up for most states so the best collection tactic they can use is make you pay the tax on it and they get a write-off.

 

Funny that they do not have to 'truly verify' that this debt is yours. Not sure about the name issue. But if the nbame was yours at one time and it is linked to your SSN you may be stuck. Unless this account was IIB. Did you ever file bankruptcy?

 

Othere may be able to offer more help.

[JaseT]

This whole 1099-C thing is a nightmare. It's like the CA's are saying, "With our last breath we stab at thee."

 

I wonder if the CA gets to claim the entire amount as a loss? Even though they only paid pennies on the dollar for it.

 

God I hope none of my old baddies come back to haunt me.

Edited January 31, 2011 by JaseT

[Gill]

You may want to talk to a CPA, or, Tax Attorney to see if you can qualify for cancelation of indebtedness under the insolvency exception under the internal revenue code section (IRS)s/s 108(a)(1)(.

[Gill]

That was 108(a)(1)(

[arrow0912]

Might want to look at the checks and balances first before you hire a CPA, attorney or seek profesional 'paid' help. Look at the tax laibility of the $5k debt and how it will play in to your taxes. Then look at the cost of consulting a CPA or attorney, ect. Which, in your tax bracket, will cost the least.

 

There is principal and then there is the financial cost of the action. Which, at this point, is more important to you?

 

That was 108(a)(1)(

[Watson1225]

First I heard from them in the mail was 11/29/10. They had called over the years but I said the person they were calling for did not exist. It was the truth - I was never known legally by the name they asked for. On 12/3/10, I sent them a request for validation with a FOAD. It was sent via fax, email and certified mail. They issued this 1099-C only 4 days later. So instead of validating, they did it this way. I am NOT paying this. My social was NEVER associated to this last name. And all income taxes since I was 16 years old have been in my maiden name. Including when I was married. This should be against the law..I thought they either validate or go away. They owned the debt after it was purchased from Chase, I never had an account with Portfolio. There must be some recourse on this.

[arrow0912]

Perhaps a CPA would be the best course of action. Maybe getting a free consultation with a Comusmer Attorney too. Good luck with getting this resolved.

 

First I heard from them in the mail was 11/29/10. They had called over the years but I said the person they were calling for did not exist. It was the truth - I was never known legally by the name they asked for. On 12/3/10, I sent them a request for validation with a FOAD. It was sent via fax, email and certified mail. They issued this 1099-C only 4 days later. So instead of validating, they did it this way. I am NOT paying this. My social was NEVER associated to this last name. And all income taxes since I was 16 years old have been in my maiden name. Including when I was married. This should be against the law..I thought they either validate or go away. They owned the debt after it was purchased from Chase, I never had an account with Portfolio. There must be some recourse on this.

[Gill]

It would also be helpful if you're able to get a copy of your Tax Transcripts for your 2010 tax year from the IRS prior to talking with an tax attorney, or, CPA. You can call the IRS and request that it's mailed to you. In the event that the JBD did, in fact, write it off of your 2010 tax year, the debt will show on yor transcript. There are really two issues, the income that is claimed to owe, on the tax side, and, the lack of validation from the credit side. For the a few hundred dollars, it's best to get some sound legal advise. The IRS won't care what the JBD did or didn't do if you have unstated income. There are concerns that it would trigger an audit, etc. to where you would pay penalties, etc. The IRS has ten years to look at your returns from the date you filed for auditing.

[BeachDweller]

If they are able to deduct the entire face value, that would be one way to make thousands of dollars for a small investment. Think of it, pay $2 for bad paper, and then write it off for $1000. At a corporate rate of taxes, it would net you at least $348 in return from write off against incoming payments. You would want people not to pay you; it's insidious.

[cashnocredit]

If they are able to deduct the entire face value, that would be one way to make thousands of dollars for a small investment. Think of it, pay $2 for bad paper, and then write it off for $1000. At a corporate rate of taxes, it would net you at least $348 in return from write off against incoming payments. You would want people not to pay you; it's insidious.

 

They can't. They can only deduct what they paid for the debt. If they bought it for $10 (quite likely given its age) that's all they can deduct. Once they stop collecting on it they can either resell it or they have to report a 1099-C.

[BeachDweller]

If they are able to deduct the entire face value, that would be one way to make thousands of dollars for a small investment. Think of it, pay $2 for bad paper, and then write it off for $1000. At a corporate rate of taxes, it would net you at least $348 in return from write off against incoming payments. You would want people not to pay you; it's insidious.

 

They can't. They can only deduct what they paid for the debt. If they bought it for $10 (quite likely given its age) that's all they can deduct. Once they stop collecting on it they can either resell it or they have to report a 1099-C.

So they deduct the $10 and send you a 1099 for $1000. Something seems skewed here.

[beli]

First I heard from them in the mail was 11/29/10. They had called over the years but I said the person they were calling for did not exist. It was the truth - I was never known legally by the name they asked for. On 12/3/10, I sent them a request for validation with a FOAD. It was sent via fax, email and certified mail. They issued this 1099-C only 4 days later. So instead of validating, they did it this way. I am NOT paying this. My social was NEVER associated to this last name. And all income taxes since I was 16 years old have been in my maiden name. Including when I was married. This should be against the law..I thought they either validate or go away. They owned the debt after it was purchased from Chase, I never had an account with Portfolio. There must be some recourse on this.

You cannot just ignore this. As others have said.. they already notified the IRS about this. You will have to fill out a forum, and dispute the debt with the IRS.

 

Here is what a real 1099C should look like http://www.irs.gov/pub/irs-pdf/f1099c.pdf

 

More info on 1099c's and Portfolio specifically

http://www.budhibbs.com/ASSIRS.htm

[cashnocredit]

If they are able to deduct the entire face value, that would be one way to make thousands of dollars for a small investment. Think of it, pay $2 for bad paper, and then write it off for $1000. At a corporate rate of taxes, it would net you at least $348 in return from write off against incoming payments. You would want people not to pay you; it's insidious.

 

They can't. They can only deduct what they paid for the debt. If they bought it for $10 (quite likely given its age) that's all they can deduct. Once they stop collecting on it they can either resell it or they have to report a 1099-C.

So they deduct the $10 and send you a 1099 for $1000. Something seems skewed here.

The deduction represents their loss ($10), while the 1099-C is the imputed income to the debtor. The imputed income is the original debt regardless of what the JDB paid because the debtor benefited from the cancelation.

[ICANHASMUNY?]

$10 is all they paid for your debt. ( pennies on the dollar...)

 

 

[Gronnie]

First I heard from them in the mail was 11/29/10. They had called over the years but I said the person they were calling for did not exist. It was the truth - I was never known legally by the name they asked for. On 12/3/10, I sent them a request for validation with a FOAD. It was sent via fax, email and certified mail. They issued this 1099-C only 4 days later. So instead of validating, they did it this way. I am NOT paying this. My social was NEVER associated to this last name. And all income taxes since I was 16 years old have been in my maiden name. Including when I was married. This should be against the law..I thought they either validate or go away. They owned the debt after it was purchased from Chase, I never had an account with Portfolio. There must be some recourse on this.

 

I understand you are frustrated but ignoring this is not going to be in your best interest. You are mad at Portfolio but this is out of Portfolio's hands. Not paying this won't effect them in any way, but it will effect you---- and if you think dealing with Portfolio is bad wait unti you are (supposedly) indebted to the IRS!