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I received a notice from the IRS regarding a 1099-C issued for my 2010 tax return. I contacted the issuer of the 1099-C and was told that it was for an outstanding car loan in 2000. I never received any letter or 1099-C from the issuer and now owe the IRS over $1,600. What are my options, I have lived in Illinois since 2009?
ANSWER
Expert Edward Wilmsen's Answer:
A 1099-C is a form that establishs forgiveness of debt. As such, yes it is taxable income in the year issued. There are exceptions but only in certain cases of bankrupcy and on a home or principle residence mortgage. Unfortunately, the your options are limited to one, pay the $1,600.
