Expert Info

Posted by daveleonard
on 21 Mar 2016
How to respond to a 1099 sent to IRS? I have been in the Philippines since 2003. Before I left the States I paid all my balances and came to the Philippines. I had one credit card but paid that off. I called the credit card company in 2006 and the man said that my account had been closed in 2006 for none payment and the balance was written off. I did not know of any charges other than what I paid off. In 2015 I sent a letter to the card company after seeing the credit bureau report about this debt and told them it was an honest error and that I would pay the balance just send me the paper work. I never heard back from them. I was never sent a notice of the cancel debt from any source. If this account was closed in 2006 or sold to a third party who inflated the balance from $800 to $24,000, that is a violation of TILA. It appears someone "re-aged" this debt and that this may be a scam. Someone apparently re-opened that suspended and written off account, charged me interest for the last ten years and wrote it off on their 2014 income tax which of course showed up on my IRS account as a cancel debt which I must figure as income on my 2014 tax return. This is a big crisis for me because I live on my social security benefit and a small $320 pension. The card company charged interest on that $800 balance and it turned into $24,041 that they took off their tax and advised IRS and I got the cancel debt. When I wrote the letter to them in 2015 they had my address yet I never received a notice of this action and did not find out about it until my 2014 1040 was sent back by the IRS and the cancel debt revealed. I earn approx $15,000 on social security, and $320 in a small pension. I have no job here in the Philippines, investments, business or any other income. I have no medical insurance, medicare does not work here. This means my income goes from about $18,000 paying no taxes to $49,000 and owing the IRS about $12,000. It will take me likely the rest of my natural life to pay this off, that is if they let me make payments on it. I am 70 years old now. Is this right for a credit card company to do? It seems to me if they absorbed the $800 in 2005/2006 that they would have had to take the $800 off their taxes as a loss in that year and not re-open the case ten years later or so adding interest to their advantage and taking off $24,000 in 2014 on their taxes.

Any advice? Thanks, Dave daveleonard
Anonymous (not verified) on 21 Jun 2016 - 17:34
Two benefits on your side. 1) There is a statute of limitations on debt. 2) You may not be in their jurisdiction. Maybe a third...

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