Could someone advise me please? Back in 2004 I went thru a very rough time. I had a mobile home that the finance company would not work with me to make the payments so I told them to come and get it. I moved out, they took it two monthes later and about 4 monthes later sent me a 1099C form. I thought that was settled. Back in May of this year I applied for a FHA loan. The finace company above had a repossession listed with a balance owed on my credit report. The FHA lender's people called that finance company and confirmed that the debt was settled. It was updated on my CR as paid/0 balance. Fast foreward to now, I note on 10/17 the finance company pulled a hard inquiry on my CR. I called them to ask why since the account is settled. After being transferred here & there this rude person comes on and says I still have a 29K balance on my acct! I say whoa! y'all sent me a 1099 form in the mail. She says they didn't have any record that was sent to me. I said you sure did. She then says prove it. So some of my stuff got lost in the move but in digging through my old records I find my copy of the 1099C, thank god!!! I scan it, call back & get thier email addy and send it to the rude person. The person promptly sends me a email saying yes they got it but do I have a copy of my tax return for 2004 showing I filed it? I only have my tax returns from 2005 & on. The previous ones got lost in the move. I don't recall if that was filed or not but I imagine it was because I remember getting an adjustment from the IRS and had to make monthly payments to the IRS and they took a portion of my next tax return. I would imagine if it was not the IRS would have told me so? And if that were the scenario I am fairly positive I would have been considered insolvent for that year as I didn't have any assets & only 20K income that year. Plus I had to pay taxes back. Do I need to mess with these people anymore? Do they have any right to ask me to send them my tax records? Isn't my obligation with them done and anything further between me & the IRS? Do I need to call the IRS and inquire about this? I am so confused, Tegleg
I wouldn't be in a hurry to send them any tax forms. It sounds like they are fishing and a tax form is a gold mine of information. Tell 'em to go away and pick on someone else or they can tell it to the judge when you take 'em to court (if they are attempting to collect a debt, then they need to abide by the FDCPA. You've already done enough of their job, from the sound of it.
Don't send them your tax return. That is none of their business if you included the info. on your taxes or not. If you didn't the IRS would be all over you by now. That company and that clerk are full of it. Tell them to go f.. themselves.
That's true. And I bet you didn't know it at the time, but if you were insolvent (more debts than assets), you didn't even need to file it and pay the taxes on it. What year did you say it was? You may be able to get a copy of your return and file an amended return if you were insolvent at the time. It might be worth paying for an hour of an attorney or accountant's time to find out.
Wow Teg, It probably seems like things never end, right? But, the finance company has no legal right to ask for your past income tax return. They have fulfilled their legal obligation for submitting a 1099-C form, and it is up to you what you did with it. So, do not forward a copy of your tax return. For your interest, you can request a copy of past tax forms from the IRS. There is a charge, but they can provide them. My guess is that someone (at the finance company) failed to submit the 1099. I would ask THEM for an accounting of the transaction, i.e., balance owed at time, sale price after surender (not repossession), transaction fees, etc. Account for the balnce "claimed" owed/written off. Question?: With your 2004 tax return, did you complete an "insolvency worksheet"? This is the affirmation that you were indeed insolvent, and hence the cancelled debt does not have to be reported as income. The good news here is that you could file a 1040X (amended return) for the 2004 tax year, you will have until the 2008 date of the day you filed your 2004 tax year return. The problem here is that you will have to recreate your debts/assets at the time of filing. But, you could be looking at a nice refund on a $29K amount! Plus the IRS does pay interest, which will be a nice amount of this figure and timeframe! Also, since the company issued a 1099 C form to you, and you do have a copy, note that you have evidence of the "cancelled" debt. If they are trying to collect, and/or or attempting any "collection activity" (which is what they are doing now), then you can sue for violations and damages! Congratulations! As we say in basketball, "you've drawn the foul"! Be positive, this is a nice opportunity!
You can get actual copies of your tax return ($39.00) or you can get a "tax transcript" for free. The transcript is bascially all the data with none of the form. It's a line-by-line listing of each entry in your tax return, it's just not in the format of the form that you filled out when you filed. Usually, a transcript is sufficient for most purposes. More details can be found at http://www.irs.gov/taxtopics/tc156.html I agree with BizWiz in that this company is giving you some rope that you could use to hang them; however, I'm a bit confused about reclaiming the overpaid taxes from 2004 that would result from the company not filing the 1099. It seems to me that you would need to pick one side or the other to stand on as playing both sides could end up worse. The two sides are: a) The loan company charged it off and forgave the debt (based on the repo) giving you the $29K as "income." So, the debt's been settled, you've declared the income when you should have and paid whatever taxes were due. In this case, any further debt collection is not allowed and the collection agency's actions could be a cause-of-action for (at least) an FDCPA suitl b) the loan company didn't charge it off, but sold it. Therefore you never received the $29K they said you did in your 1099 and the CA can come after you for it (in compliance with the FDCPA, of course). That would seem to be a much more difficult path to take, in that it would require you to open up a bunch of closed/lost files to: "undeclare" the $29K from 2004 and get a refund, re-pay or deal with the CA, etc. I'd pick (a) if I could and argue from that point. You may have to argue it in court, but if you have more documentation than they do, then that should (eventually) work in your favor. For now, I'd just send them the "validate or leave me alone" letter.
To clarify a bit what I was saying: Teg's possibility of a refund for "overpaid tax" has to do with being insolvent (more dents than assets) at the time of receiving the "income" from the home surrender. Per IRS regs, income from "cancellation of debt" is not taxable if you were insolvent at time of receipt. The time sensitive issue here is that you have a maximum of three years to file an amended tax return (three years from date of original filing). As for the "debt" itself, the matter is closed, since she has the evidence with a 1099 C. Yes, further action cannot be taken which even precludes the hard inquiry on her credit report now (read that..violation!). This firm is not walking on shaky ground with actions made to date, and per conversations to Teg.
That's where I was going. If Teg was insolvent, an amended return could be filed. If additional taxes (and interest, penalty, etc) have been paid, they could be refunded. If taxes weren't all paid on time, based on the 1099, it may be possible to get even interest and penalties refunded. It might be a bit of work, but probably worth it.
Thank you all, I do appreciate it. I don't know what this company was trying to pull. I called them asking why there was a hard inquiry on my CR and after going through a few peeps who didn't know I get transferred to thier recovery dept. Then I get told I still owe them 29K. I tell them no, I don't, and that a 1099C was sent to me by them. This recovery dept woman tells me that I was not sent a 1099C and all but flat out said I was lying. I told her I would have to try and find it & hung up. She had insinuated they would persue the debt. Imagine my releif when I found the danged thing. I immediatly called back & got the recovery ladies email and sent it by email to her. I don't have a fax but I do have a scanner. The reply I got was "Okay I got that. Now do you have your tax return showing where you filed this?" To me it sounded like she wanted me to send that & that if I didn't file that with the IRS they could still persue the debt. Thats what confused me. But I was unable to locate anything except my W2 for that year and something was telling me don't send her anything else. So I didn't, I posted here instead. I'm glad I did. Now is where it gets fuzzy, when I received that I didn't know what 1099's were or what to do with them. I had thought they had sold the house and the debt was settled. I don't think I actually filed that with my taxes & I don't recall filling out a insolvency sheet. My total income for 2004 was 24K, the 1099C amount was 29K. I would imagine that I was insolvent as I had nothing, had no car, barely any money, 3 kids and my hubby and I were seperated. I went to stay with family until I got back on my feet. Being that this company says they have no record of the 1099C being issued I take it it may not have been reported by them to the IRS. I haven't heard from the IRS at all concerning it. Now this is where my mass confusion lies. What are the timelines for ammending old returns? It's been over 3 years. If this company did not file the 1099C can they do it now? Do I need to submit the 1099 to the IRS & hope for insolvency? I am so afraid of getting stuck with taxes on 29K. At this time I am debating letting sleeping dogs lie. I plan to dispute the inquiry they made on my CR. And if they go back and change the way it's reporting currently as paid 0 balance I will seek retribution. It's not my fault they can't keep thier records straight & it is my opinion that they issued me the 1099C & any dealings with them on my part is now done. I wish I had never called them but chances are that worse stuff would have followed (lawsuit etc etc) if I hadn't. I think the inquiry came because the debt will be sol in 2008 & they were fishing for collection activities concerning it. Between this & my debit card number stolen a couple of weels ago I am low on patience. I got all the money credited back, a new debit card and so far my CR's show no new inquiries or accounts. But so far I have received children's learning cd's (had to call and cancell the bogus membership) and yesterday 2 bottles of wine (had to call & cancell that but they said to keep the wine) evidently the scammer signed me up for offerrs for him to get a free ipod or PS or whatever they are giveng away today. The children's cd's CSR said for me to drink the wine to take the edge of the probable 20 more phone calls I'll have to make. Sigh, tell me this will go away Tegleg
Three years from when you filed or were supposed to file, whichever is later. 2004 taxes were due April 15, 2005. So the three years goes to April 15, 2008. You should contact the IRS and ask if you filed or not, and if you did get a copy of your return. If you didn't file and would have gotten a refund, they will still send it to you. If you filed and included the 1099, you can amend and still possibly get money back. If you didn't file the IRS can still come after you. So, you're better off to meet this head-on, right now. You actually still have a chance to get some money here.
I did file taxes for 2004 I just don't beleive I filed the 1099C, all I have is the W2 for that year, not the return, the return was damaged while in storage. I recall I beleive I got like 5K back that year I remember I qualified for the EIC because of the income being low. Would they make me repay that 5K? I don't know how that works, at this point I am afraid they are going to ask me for a couple of grand in back taxes. Whatever the tax runs on 29K. W2's indicate total income for 2004 was about 25,000 I have 3 kiddos and got the EIC that year. No assests, I didn't have a car, lost my home, no savings or funds or anything. I could'nt even afford a cell phone or to pay the utilities. Will they base any of this on my income now since it is double what it was then? I should call the IRS. I don't like something hanging over my head. And IRS trouble is not what I want. Wish I knew all this back then. It was a rough year, I literally crawled back from the depths of hell to get where I am today. What doesn't kill ya makes you stronger. Tegleg
You shouldn't have to pay anything back. If you were insolvent there was no requirement to file the 1099 or pay taxes on it. I'd just let it go. The IRS only has three years to audit, also, unless they think they can prove fraud. They wouldn't have enough for that in this case. The finance company is the one that could be in trouble. If they didn't file the 1099, there is a penalty for that. I don't think they'd file it now and risk incurring the penalty. Put this away and don't worry about it. If the IRS sends you a letter, just fill out the insolvency form and send it to them, and they will probably just go away. I had a similar situation with a 401(K) rollover. Even though I noted that it was a rollover, they sent me a notice of taxes due. I got the statement that it was a rollover, sent it to them, and that was that. You have enough to worry about. If the time comes, we'll deal with the situation then. But I don't think anything will come of it now.
Teg, be careful here, the year SOL for tax amendements and audits does not cover "gross misrepresentation" (>20% of gross income). The moral here is, call the IRS, and explain the full situation to a rep. They will help, and guide you through the correct forms. Please understand that this 1099 should have been filed by you, and an "insolvency worksheet". Be careful here as I think it has changed since the 2004 tax year. I agree, the question of "where did you file your return" makes me think they want to know if you reported it. In other words.."do they have to cover their a.. now?" I would still look into this, I have an article about this that I will look for and try to post on this thread for you. But, don't be afraid to speak to the IRS, they will help you through this. You won't owe based upon your financial situation at the time. P.S. When did you file BK? Was it during this time? This may help as evidence of "insolvency"
No the bk was in 2002. This was for the mobile home we used for our primary residence. It was reaffirmed during the bk. We had it parked in a mobile home park. The rent there at first was reasonable but then every 6 monthes or so they were raising the rent on us + the water, sewage & trash included. At the time of default we were paying a 400 mobile home payment and a 600 rent payment for a total of 1000 a month. I just wasn't making enough money at the time. And things just snowballed from there. So I left, moved in with family until I could save up enough to rent a cruddy old house in my hometown, had relatives help with childcare so I could take a night shift job and worked my way up from there. I was primarily worried about having to pay taxes back on it. That was my main concern. But if I wasn't considered insolvent that year I don't know how I could have been considered. I will prob feel better if I do call, I was just scared to. I didn't even know that I was supposed to file it. Tegleg
Teg, Not to confuse you, but...if you are very hesitant about speaking to the IRS about this, the odds are that you will never hear anything about this from the IRS. If you make it past the three years from date of filing (sometime in 2008), then you could argue that there is no "material difference" in your income for that tax year, and hence no action can be taken. If your return had been randomly chosen for an audit, it would have been chosen by Sept. 2005. The other side of the risk here is the "cancellation of debt". As I said before, my sense is that the company did not file the 1099 C with the government. The fact that the 1099 C is for the entire amount of the debt means it is totally forgiven. The debt should not be able to be sold now, or attempted collection activity pursued. For example, if an account goes to collection for $10,000.00, and the consumer ends up settling for $5,000.00 (with the collection agency), then the $5,000.00 difference is the "1099 C" amount. You have to wait until the debt is "closed" to issue the 1099 C. The problem here is that if the company did not submit the 1099 C, they may argue the amount owed is still collectable. The advantage of your filing the 1099 C with your taxes is that you "close the loop" on the debt. So, it's up to you, I'm just trying to give you all sides of the issue. And trying to let you know that this is not a big item to worry about, either way.
I agree. That's why I had said put it away and don't worry about it. I would probably call the IRS, but I understand that a lot of people are afraid to do that. The change that any tax implications will ever even be implied are miniscule. Even if the IRS initially tried to claim "gross misrepresentation," I think that the insolvency issue would make that go away. The IRS isn't going to spend a lot of money on an issue that will net them nothing.
Tegleg - my answer to the witch who asked me to prove I included the 1099C on my tax return would be: "Your company made it an issue between me and the IRS by issuing the 1099C. It is an issue between me and the IRS as to whether it was included on my tax return or not, and it is none of your business. Since I no longer legally owe this money, because your company forgave the debt, if you call me again I will be hauling your butt into Court."
The 1099C was from 2004. If he had not included it on his tax return he would have heard from the IRS about it by now. If the 2004 tax return was filed on time (by April 15, 2005) it goes Out of Statute for Examination purposes on April 15, 2008. This, of course, assumes that the creditor sent a copy of the 1099C to the IRS. If they did not, then I would take the position that they are using IRS documents as collection letters in an attempt to lie to the consumer and that this is a huge FDCPA violation.
Thank you all for helping me understand this all better. This company confuses me. I don't think they know what they are doing. The 1099C was for the full amount of the debt. I am fairly sure it wasn't filed to the IRS on either side. Mine (because I didn't know to) & thiers (who knows why). Because I really think that 29K would not have escaped the IRS's notice. Plus I was told it was sold, looking back on the amount I don't beleive it was, the numbers don't add up. The debt will be reaching SOL in 2008. I really beleive thier hard pull on my CR was investigative as to whether they could/should sue me or not. Since I had received no correspondance from them I beleive they were setting up to have me served. Call me paranoid but thats what I feel. It wasn't expected that I would see the inquiry & call them about it. I find out they still think I owe them 29K and they immediatly start asking me questions about my address yadayada and flat out say "We do not have record of a 1099C being issued to you." At that point, if I had not found my copy I would have prob been screwed, big time. It would have been my word againest thiers. But I did find it and scanned it to them. When the rude rep replied in email asking if I had filed it I took it, at that time, that they were going to try to say since I didn't file it they could still persue it. But after reading replies I think it was because they hadn't filed it either. I have had no further calls or emails from this place. Unless I get something in the mail. I don't think anything further will happen. But I am leary that they may be waiting till they know it would be too late to amend my 2004 tax return with it and try something then. I would not put it past them to accuse me of forgery or some bull. I know that sounds very paranoid but I don't trust them one inch. And there is a reason for that: When I was apping for my current mortgage this acct was questioned because it was reporting as a repo on my CR's. The credit agency that my lender works with got me and this finance company on a 3 way call and confirmed the account was settled. The finance company then updated my CR's to paid/0balance. Now why would they say it was settled 5 monthes ago & today try to say it isn't. My income now is over double of what it was in 2004, I have finally gotton my CR's fairly decent and have worked hard to get my house and laid the foundation for acquiring better CC's. In my warped opinion they would love to wring dollars out of me. They are snakes and I don't trust them. I lump them in with the bottom feeder scum sucker CA's I read about. I have decided to call the IRS and talk with someone since I know I would have been insolvent that year. An income of 24K, 3 kids and no assets whatsoever in 2004 I even had to go on public aide for a short time. Surely that will be considered insolvent. I am scared not to deal with it on my end and if I deal with the IRS now I won't have to fear any further action from these people. It may be unecessary but with the way my luck has been I would'nt bet on the worst not happening. I hope I make sense, am I crazy? I'm sure I am. Tegleg
