IRS Form 1099-C and
1099-A
If a lender issues the
taxpayer either an IRS Form 1099-C or an
IRS Form 1099-A, please contact Arlington Heights Attorney, Robert S. Thomas so the proper procedures are taken to
relieve you of your tax burden.
IRS Form 1099-C is used by a lender
to report a cancellation of debt income to both the IRS and to the
taxpayer.
It is common for lenders to wait and issue a 1099-C years
after the year of forgiveness (i.e.: Identifiable Event). The taxpayer must contact both the IRS and
the lender and ask the lender to issue a 1099-C that reverses or corrects the
previous 1099-C.
If the taxpayer receives a 1099-C in the year of the
identifiable event, the taxpayer still must contact the lender and inform the
IRS of the same.
The taxpayer must file IRS Form 982 in the year the debt
is forgiven by a commercial lender.
The taxpayer must include
with IRS Form 982 the taxpayer’s letters to both the lender and the IRS and the
IRS Form 1099-C.
If the lender issues an IRS Form 1099-A, the lender is
telling the IRS of the lender’s acquisition of an interest in the secured
property in full or partial satisfaction of a debt or the abandonment of the
secured property.
This is different from
“Forgiveness of Debt.” However, do not ignore the 1099-A.
For any questions or concerns, please feel free to contact the law office of Arlington Heights attorney Robert S. Thomas. To read Discharge of Debt part one, two or four click on each link.
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