I represent companies and individuals in the St. Louis, surrounding areas and the state of Missouri who have IRS and State Tax problems that include unfiled tax returns and past-due taxes. As the new year has arrived it also means it's time to deal with one of our favorite pastimes, filing of last years income taxes. In the next couple of weeks if not already you are recieving your 1099's for miscellasous income, brokerage statements but what if you get a 1099 C? What is it and what was it for?
The 1099 C is for cancellation of debt. Perhaps things haven't gone as well as you like and you had for example a credit card didn't get paid as per the terms of the agreement and the issuing bank decided that they were going to take a loss and write it off. When that occurs does that mean it's not your problem any more? No it means that one, it's getting reported to the credit bureau which damages your fico score and two the issuing bank or other creditor whomever that may be is generating income for you that you weren't expecting. The 1099C also could be a result where a mortgage company foreclosed on a property, took title to it, sold it resulting in the 1099 C. Some special rules apply.
This unexpected income can and does create tax nightmares for individuals and companies.
Is there a way to minimize the damage and perhaps avoided paying the tax on this misfortute? Yes. There are a couple of ways that this can be addressed.
1 .If you can prove you are insolvement your tax advsior as part of your tax return can fill out form 982 and attach it to the return for the year of discharge.
2. Filing bankrupcy also could solve the problem.
If you or someone else you know are having IRS issues with cancellation of debt, unfiled tax returns and outstanding tax obligations please feel free to contact me info@firstname.lastname@example.org or call me @ 636-397-2759 or text me @636-866-4554.
Enrolled Agents are licensed by the Treasury department and can represent taxpayers at all admintrative levels of the IRS.
Steve Shapiro, EA
Arch Tax Resoluiton
620 S. Benton
St. Charles, MO 63301
(P) 636-397-2759 (F) 636-397-6312