Quick Answer: A 1099-C issued to someone who wasn’t the original borrower is highly unusual, as American Express typically only reports forgiven debt to actual account holders. The wife should contact the IRS directly to dispute this erroneous tax reporting, though the expert suspects there may be missing information about her connection to the original debt.
Question:
Dear Steve,
A 1099C was issued in my wife’s name for debt her sister incurred and that was credited to my wife as income to the IRS.
Each weekday I send one short email: one story that caught my attention, why it might matter to you, and one manageable thing you can do with it. A couple of minutes, and a dad joke.
In the latest issue (Nov 10): Prices rose again. What's your own number?
Free. I sell nothing. Unsubscribe any time.
This was of an approved settlement my sister paid to American Express.
I spoke to American Express Customer service three times and was told there is no number to American Express Outside Agency department that handles such matters but I could mail them a letter and fax request for a review and if approved a new 1099C issued.
I sent a certified letter in July and a fax in August but have not heard anything.
Is American Express Outside Agency Department responsible for reviewing/revising an error on the 1099C and if so what is their contact information? If not who do I contact?
Thanks,
Joe
Answer:
Dear Joe,
Well, that is odd for sure. If your wife was not a co-signer or borrower on the loan it’s not clear how she would be involved at all.
If this is just a 1099-C error in reporting, I just answered another question where I described the process to get it corrected. See this post.
Your wife would need to call the IRS to get this ball rolling.
However, I can’t help but feel there is more to this debt and that maybe you are not getting all the facts. American Express might not always be perfect but I’ve never seen a 1099-C issued in the name of someone not associated with the original debt.
Please do some more digging and report back in the comments section below.
Before You Sign Anything: Run any debt relief contract through the free Contract Decoder to spot hidden fees and unfair terms. Check the company’s complaint history with the Scam-O-Meter.
Compare Your Real Options: Most debt relief companies won’t tell you about all your options — especially the ones they can’t profit from. Credit counseling has a 21-27% completion rate. Settlement resolves about 1% of enrolled debts fully. Chapter 7 bankruptcy generally ends in a discharge for individual filers in more than 99% of cases, excluding cases dismissed or converted (U.S. Courts) — and protects your retirement. Take the Find Your Path quiz for a recommendation based on your actual numbers.
Asked 1099-C question.
Answered.