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My Mother Passed Away But Received 1099-C in Error

Written by Jim Buttonnow

Question:

Dear Steve,

My mother passed April of 2019 and Portfolio Recovery Associates LLC has sent her 3 1099-C forms with the Identifiable event date of 9/27/19 and Identifiable event code of G. The statute of limitations in South Carolina is 3 years and these debts are older than 10 years. I don’t believe the cancellation of Debt was 9/27/19 but done in previous years. How can I fight this?

Stevea

Answer:

Dear Stevea,

I didn’t have a clue on how to answer this so I asked my tax friend Jim Buttonow.

Here is what Jim said, “Steva needs to contact the company that issued the 1099-Cs and ask them to correct. Unfortunately, most of these companies have been reluctant to correct their forms. With box “G” selected on the 1099-C, the creditor has indicated that they have discontinued collecting and, as a result, issued the 1099-C. If the statute of limitations had expired, the creditor would have selected box “C.”

As a practical remedy, Steva should look to use an exclusion for the 1099-C (i.e. see Form 982 for exclusions including common exclusions such as insolvency or home acquisition indebtedness). If the 1099-C is corrected to a prior year, Steva would still have to report the 1099-C (and presumably use an exclusion) in the prior year.”

Jim

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.


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About the author

Jim Buttonnow

Jim Buttonow, CPA/CITP, practices in the area of IRS and State tax controversy. He has more than 29 years of experience in IRS practice and procedure. Reach Jim at [email protected] or through his website www.buttonowcpa.com

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