Tax Court: No Cancellation of Debt Income Despite Form 1099-C –Accounting Today

Roger Russell recaps the decision at Accounting Today.

The Tax Court, in a recent summary opinion, ruled that an individual did not have cancellation of debt income in the year that a collection agency issued him a Form 1099-C and stopped its automated collection efforts.

The IRS determined a deficiency in David Stewart’s 2008 income tax of $2,138, based on a Form 1099-C issued by the collection agency. The underlying debt was incurred on a credit card obligation in 1994, and was defaulted on in 1996. Maryland Bank National Association (MBNA) charged off the debt that same year.

Find out case specifics by reading the full piece at Accounting Today.

This is the Form You’ll Need.  But  You’re Still Liable for Reporting the Income of Forgiven Debt!