Form 1099-C

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Form 1099-C

A form that a lender files with the IRS if it cancels a debt in excess of $600. Lenders are required to file 1099-C whether the borrower is a natural person or legal person.

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Additionally, continued the Service Center Advice, "we express no opinion whether utilization of Form 1099C as a debt collection technique may violate provisions of non-Internal Revenue Code law, such as Federal Bankruptcy law, and possibly provisions of the Fair Debt Collection Act and similar consumer protection legislation."

1099s for deadbeat clients? A law-office management expert puts forth the option of sending a nonpaying client a 1099 for the value of your services. Is it really OK to do so?

This doesn't affect the collection effort, but it does reinforce the importance of using "open-ended" phrases in the IRS collection letter such as "we will, at our option, issue the Form 1099c if payment is not received."

Leveraging Uncle Sam: getting the threat of the IRS behind your collection effort

It reported COD income (Form 1099C) to the taxpayer for the difference between the mortgage debt and $1.

This information will support both a corrected Form 1099C and the taxpayer's assertion to the IRS that the 1099 is incorrect.

Mortgage Forgiveness Debt Relief Act of 2007 reduces negative tax consequences from foreclosures

Generally, the lender would have notified the IRS by filing Form 1099C (Cancellation of Indebtedness).