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  1. #1
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    Feb 2013
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    Default Can a Creditor Issue a 1099 if the Debt is Past the Statute of Limitations

    Can debtors still 1099-c even if the debt is pass due the statue of limitations in California?

  2. #2
    Join Date
    Dec 2008
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    Calif
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    289

    Default Re: Can a Creditor Issue a 1099 if the Debt is Past the Statute of Limitations

    From what I've read on this issue, yes. Owing taxes has no statue of limitations.

  3. #3
    Join Date
    Feb 2013
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    2

    Default Re: Can a Creditor Issue a 1099 if the Debt is Past the Statute of Limitations

    I don't owe taxes, a credit card debt collector called saying I owe money on a 2003 Credit card and if I didn't pay they were gonna 1099C, So what actually is a 1099-C? Tax garnishment? And can they do that on a 11 year old debt?

  4. #4
    Join Date
    Sep 2011
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    OH10
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    17,019

    Default Re: Can a Creditor Issue a 1099 if the Debt is Past the Statute of Limitations

    It is the cash benefit you received by them writing the debt off as non collectable. As you benefited, you receive the 1099C.

    http://www.irs.gov/uac/Form-1099-C,-...lation-of-Debt

  5. #5
    Join Date
    Jul 2007
    Location
    Florida
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    2,344

    Default Re: Can a Creditor Issue a 1099 if the Debt is Past the Statute of Limitations

    The statute of limitations applies to the collectibility of the debt, not the legitimacy of the debt. When the creditor forgives (cancels) the debt has nothing to do with the statute of limitations. Federal law controls when creditors are required by law to issue 1099-C, not state statutes of limitations.

    Yes, they can do that if they write off the debt. However, collection agents are liars. Also, they can only issue 1099-C when an identifiable event occurs, not as a threat or as retaliation. Further, since they are not the original creditor and they are not primarily in the business of lending money they may not be able to legitimately issue a 1099-C.

    My personal opinion is that this is bluster, but the original creditor could and should issue a 1099-C when they write off the debt and cancel it. The fact that they sold it to a collection agency tells me they never cancelled it.

  6. #6
    Join Date
    Dec 2008
    Location
    Calif
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    289

    Default Re: Can a Creditor Issue a 1099 if the Debt is Past the Statute of Limitations

    Instructions for Forms 1099-A and 1099-C http://www.irs.gov/pub/irs-pdf/i1099ac.pdf This should help. A third party debt collector can issue a 1099-c. They don't want to, they will threaten to, but according to the IRS they have to sooner or later.

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