The Most Outrageous Tax of the Year

Personal Finance

The Most Outrageous Tax of the Year

The Most Outrageous Tax of the Year

It just may become the latest outrage during a year of outrages. At the precise moment when the federal government finally delivers a modicum of justice and some economic relief to millions of homeowners victimized by the nation’s largest banks, the government threatens to beat those victims over the head with a punitive old favorite… Read More

What to Do When Debt Collectors Break the Rules

Managing Debt

What to Do When Debt Collectors Break the Rules

What to Do When Debt Collectors Break the Rules

Getting a call from a debt collector is never pleasant. But Credit.com reader Sara Shannon is getting a double threat. Not only is a collections agency threatening her with a lawsuit, it also plans to sick the IRS on Shannon’s disabled, 84-year-old mother. “He is threatening to file a 1099-C and said the IRS will… Read More

Debt Cancelled, But How Much Will It Cost Me?

Managing Debt

Debt Cancelled, But How Much Will It Cost Me?

Debt Cancelled, But How Much Will It Cost Me?

It’s a truism of the U.S. tax code that a simple question usually begets a complicated answer. That’s certainly the case for Sylvia, a Credit.com reader with a simple question about an increasingly common situation. “My credit card company just sent me a letter that they will charge off. . . or they will forgive… Read More

Foreclosure Aftershock: Paying the IRS

Mortgages

Foreclosure Aftershock: Paying the IRS

Foreclosure Aftershock: Paying the IRS

Christine, a Credit.com reader, thought that after losing her home to foreclosure, there would be no new financial shocks for a while. Then she received a letter from the IRS. “I filed my taxes in 2010 and thought everything was fine,” Christine wrote in a comment to a Credit.com story, “then yesterday I received a… Read More

What to Do If You Get a 1099-C for an Old Debt

Managing Debt

What to Do If You Get a 1099-C for an Old Debt

What to Do If You Get a 1099-C for an Old Debt

Earlier this year, questions poured in from readers grappling with how to deal with 1099-Cs they received from lenders reporting “canceled” or “forgiven” debt. I wrote a number of stories addressing the issues they raised, and vowed not to touch the topic again until next tax season. But the questions kept coming in. One kept… Read More

Tax Help: How to Dispute A 1099-C Form

Managing Debt

Tax Help: How to Dispute A 1099-C Form

Tax Help: How to Dispute A 1099-C Form

In 2006, “Anne” and her husband negotiated a settlement on credit card debt of $7,500 with one of the country’s biggest banks for roughly $2,900, wiping out just over $4,500 in debt. But just recently, the couple received a 1099-C from the credit card issuer reporting $16,000 in cancelled debt for the 2011 tax year. Both… Read More

Cancelled Student Loan Debt Creates Tax Nightmare

Students

Cancelled Student Loan Debt Creates Tax Nightmare

Cancelled Student Loan Debt Creates Tax Nightmare

When Kim Thompson’s $91,000 student loan balance was cancelled due to total disability, she thought she had put at least one of her problems behind her. Instead, she traded it for another: a massive debt to the IRS. Two years ago, Thompson, who lives in New Jersey, was diagnosed with a tumor that eventually led… Read More

When to Say No To a Mortgage Modification

Mortgages

When to Say No To a Mortgage Modification

When to Say No To a Mortgage Modification

You read the headline right. As shocking as it may sound, sometimes it may in fact make sense to say no to a mortgage modification, even when your house in underwater. As you may have heard, some of the nation’s biggest lenders will be offering loan modifications to their customers, and some of those deals… Read More

1099-C Wrong? Taxpayer May Pay With An Audit

Personal Finance

1099-C Wrong? Taxpayer May Pay With An Audit

1099-C Wrong? Taxpayer May Pay With An Audit

Taxpayers who get a 1099-C listing cancellation of debt income have enough to worry about. Their main concern: “Do I have to pay taxes on the reported amount?” They shouldn’t have to worry that a lender’s sloppy practices could also be setting them up for an audit. But that’s precisely what may happen when lenders… Read More

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