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Portfolio Recovery Associates Sent Me a 1099-C I Should Never Have Received

Portfolio Recovery Associates Sent Me a 1099-C I Should Never Have Received


Dear Steve,

In 2003 I opened a USBank Checking account which included a Credit Card and Line of Credit. In 2009 became unemployed and defaulted on debt. USBank stopped collection in and discharged the account 2010 but did not send a 1099-C. Portfolio Recovery Associates purchased a record of the discharged account from USBank in 2011. In 2014, PRA brought a civil action in St. Louis County seeking judgement on the credit card portion of account. There was no reference to the line of credit.

I responded through court demanding PRA prove that I owed debt to PRA. PRA could not prove I owed the credit card debt to PRA. In 2015 PRA agreed to drop the case for $800 without my acknowledgement of the debt. PRA issued 1099-C for total amount of the credit card in 2015. In January of 2016 PRA discharged the the amount from the USBank account’s Line of Credit without any correspondence with me. In January of 2017 I received a 1099-C from PRA in regard to the discharged of Line of Credit. I called PRA and disputed the 1099-C as I have no record of a business relationship with PRA in regard to the Line of Credit.

1. I dispute the 1099-C as PRA has yet to provide any evidence or documentation that I owe a debt to PRA as a result of USBank default. To what degree is the burden of proof on PRA with IRS in regard to USBank account?

2. Provided USBank charged off the debt when I originally defaulted in 2010, how can PRA discharge the same amount from the account in 2016?

Thank you for any help you may be able to provide.


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Dear PTT,

I know this is a pain but you can dispute an erroneous 1099-C. Here are some steps to take.

You’ve already taken the first step to contact the issuer and dispute the erroneous 1099-C. Next, call the IRS and ask the IRS to start a 1099 Complaint. You can reach the IRS at 800-829-1040.

See also  How to Deal With a New 1099-C Issued on Old Debt Using Little Known IRS Form 4598

The representative should complete a Form 4598, “Form W-2, 1098, 0r 1099 Not Received, Incorrect, or Lost.”

Here is the overall process.

  • Call the IRS (1-800-829-1040 ) and have an IRS representative initiate a Form 1099 complaint. The IRS will fill out form 4598, “Form W-2, 1098, or 1099 Not Received, Incorrect or Lost”
  • A letter will be sent to the creditor requesting that they furnish a corrected Form 1099 to the taxpayer within ten days. The letter advises the payer of their responsibilities to provide a corrected Form 1099 and of the penalties for failure to do so.
  • The taxpayer will be sent a letter that provides instructions and a copy of the Form 4598, “Form W-2, 1098, or 1099 Not Received, Incorrect or Lost.” The Form 4598 may be used in the event that the payer does not provide you with the corrected Form 1099 in time to file your tax return.
  • Attach the Form 4598 to the tax return. Be prepared to support the change to the Form 1099 with substantiation that proves the adjusted amounts. – Source

Damon Day - Pro Debt Coach

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Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.
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