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Kaplan and Seager 1099-C Collection Letter Does Not Add Up

Written by Steve Rhode

Question:

Dear Steve,

Received what looks like a collection letter threatening to file a 1099-C if I don’t pay a debt that supposedly happened 17 YEARS AGO.

Firm is called Offices of Kaplan and Seager. Not much online about them, I’ve never had any other contact from them. They claim I had an account with Nextcard. According to online research this bank was shutdown by the federal government due to massive fraud about 13 years ago.

The letter doesn’t contain any required verbage that you usually see on a collection notice. It shows the Charge-Off Balance of $2,208.48; origination date of 12/31/1998; $3,538.41 interest that this company appears to have awarded to itself.

The 1099-C is part of this one page “Notice of Intent to File an IRS 1099-C” form. It has my name and address, Event Code C, but does not include my SS# or Creditors ID number.

How would you handle this?

Should I respond? If so, what would you recommend?

I uploaded a copy so you can review it. The back is blank.

Thank you for your time.

Mario

Answer:

Dear Mario,

It’s a collection attempt. They appear to significantly misrepresent the reality of the 1099-C and imply everyone may be subject to taxes owed. That is a gross oversimplification and not true in many cases. Read this and this.

Additionally I think you could make the argument to the IRS that if a 1099-C was issued in this specific example, it is in error. If they actually did report this debt I would suggest you contact the IRS to begin an 1099-C reporting error complaint.

Form 1099 Correction Process

  • Call the IRS 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 entity initiating the 1099 and request that they furnish a corrected Form 1099 to the taxpayer within ten days. The letter advises the entity 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
READ  My Mother Passed Away But Received 1099-C in Error

Sincerly,
Steve

You are not alone. I'm here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don't give up.





About the author

Steve Rhode

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.

14 Comments

  • I got a letter from them as well . I did some digging and Kaplan and Samuels is not listed with the bbb. They have a number on the letter that is an answering service to a receptionist that never picks up. They lie and say false allegations of the going into litgation. Someone please file a complaint with the state of California before that hurt anymore people. Beware of the number 909 512 6878 and 888 418 0810

  • i received this same letter a couple months ago and put it aside not thinking about anything. I found this letter today cleaning out my desk today and I’m not gonna lie, i freaked out. So i e-mailed the company saying there has to be something wrong. i have a letter from another debt company saying it was paid off in full back in 2010 (for some reason i had the two letters together). now looking closer at this fake letter (or at least i hope), the account number is different from the letter that states i paid the debt off. Then i read these comments and found what to look for. i really would like to thank everyone made these comments and put my mind at ease. now the question is i already e-mailed them, do i just not respond if they do or do i tell them there was a mistake?

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