How Do I Deal With a 1099-C I Don’t Think I Owe?

Question:

Dear Steve,

I got a 1099-C from a bank headquartered in Malaysia for $970, but I never owed anyone that amount, and it is not on any of my credit reports.

The 1099-C says forgiven debt for retail. Again, nothing on any credit reports like that.

I filed my taxes to be on time, and now I need to amend them to get rid of this. How do I do that with the amended return?

Kelleen

Answer:

Dear Kelleen,

I think you have two issues here.

The first is that an item that does not appear on your credit report does not mean you don’t owe the debt or didn’t have the debt. A credit report is not a total or comprehensive listing of debts in your name. It only represents the debts that are reported to the credit bureau.

Before you rush to file an amended return, I think you should read How to Deal With a New 1099-C Issued on Old Debt Using Little Known IRS Form 4598.

If you believe the 1099-C issued is, in fact, incorrect, you will have to gather up all the patience you can and then call the IRS. When you call the IRS (1-800-829-1040), have an IRS representative initiate a Form 1099 complaint. The IRS will fill out form 4598, “Form W-2, 1098, or 1099 Not Received, Incorrect or Lost.”

This will start the process to require the creditor that submitted the complaint to correct the 1099-C.

The bank out of Malaysia has a United States operation and may have purchased an old debt that was originally from a different creditor. But before we begin to make assumptions, let’s get some facts by following the process above.

Please post updates to me in the comments section below so I can keep helping with this.

Sincerly,
Steve

You are not alone. I’m here to help. There is no need to suffer in silence. We can get through this. Tomorrow can be better than today. Don’t give up.

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