Receiving IRS Form 1099-C: What You Need To Know

The 1099-C form is sent to taxpayers who have had $600 or more of debt canceled, which is then treated as taxable income. Taxpayers must report this to the IRS which could increase their tax obligation. It is crucial to check credit reports for accurate balances after receiving a 1099-C. Discrepancies may require professional help to resolve, especially since the IRS doesn't view 1099-C as a creditor's admission of debt discharge. In some cases, courts have ruled that borrowers don't have to pay debts after a 1099-C was issued.