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You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes) > 1099C
Expert: MEdusa - 11/1/2009
Question
Once a debt from a credit card company hits the statute of limitations, set forth by the state. I understand they can't go to court to collect. But can they still 1099 you?
Can a collector who what not the original creditor, 1099 you? Either before or after the Statute has run?
If you got the credit card in one state, and then a few years later moved to another, and other because of work. Which state sets the statute of limitations? The state where you started the card, defaulted on the card, or the state you now live in?
Thanks
D
Answer
The question is DO you have income in the current year that you need to report with or without the 1099. NOT if they will actually send you a 1099.
Forgivness of debt occurs when they can no longer recover the debt and the year in which this occurs, you have income (subject to possible offsets - ie insolvency). period.
IF IF IF you chose to omit that income, 1099 or not, then you are not preparing your taxes according to the proper administrative regulations and applicable laws currently in force. Will you get caughty being naugty? unlikely - but that is sooo totally on you. bad man for even thinking it - even if it is a HUGE amount.
The collection agency is not the reporting person unless the actually acquired the debt and are not collecting on a fee (very very unlikely).
I am not a lawyer, but below i have linked a great discussion on the SOL. SOL rules vary widely by state and one nifty key is to enforce more stringent (longer) rules, the lender will have to actually produce a copy (sometimes even the original) application and document.
generally, the creditor has the choice between where you signed the agreement and where you live now.
http://www.creditinfocenter.com/rebuild/statuteLimitations.shtml#2
note; this is NOT tax or legal advice - but a general discussion on a FREE chat board.
MEdusa
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