1099-C Cancellation of Debt (Duplicate)

[velketor]

In 2016 I received a 1099-C (Cancellation of Debt) from my creditor (Bank of America) for $3067.  Since this increased my overall income, I reported it  and was taxed accordingly.  That should have been the end of it.

In 2017, I heard nothing.

In 2018, I heard nothing.

Now it's time to file my 2019 tax return.  For some strange reason, I received the exact same 1099-C, this time with a date of 2019 on it, from the same creditor (Bank of America), with the same account number, for the exact same amount of debt.  Since I already reported this income in 2016 and paid taxes on it, I am confused why I am receiving ANOTHER 1099-C for this same debt.  I called the creditor (Bank of America) and they said it has nothing to do with them, and that I need to call the IRS.

Thoughts?

[AmyC · Accepted solution]

The creditor, Bank of America, needs to issue a corrected 1099C showing that you do not owe the money.

If they refuse, you have two options:

1. You will file your return and not claim the 1099C. You will then receive an IRS letter stating that you owe taxes, penalties and interest on the money. You will have to convince the IRS that you already paid that amount on your 2016 return. If you have a good paper trail and evidence, like a phone call log, where you tried to correct the situation, that will help.

2. You would add it to your return again this year and pay taxes again.

[velketor]

I contacted Bank of America to request a corrected 1099C to show that I do not owe any money, and they said they can't issue a corrected 1099C because the 1099C they issued me in 2016 was "recalled".  They never sent me any paperwork on this "recall" and they refuse to send me any paperwork on this "recall" now.  They said there is literally no paperwork to send me about the "recall".  So I paid taxes on the 1099C in 2016 for no reason.

The IRS told me to file my taxes without paying the 1099C this year, and AFTER I file my taxes, to send them a hand written letter explaining the entire situation and hopefully someone in the IRS reads it and puts 2 and 2 together instead of sending me a bill.  I do have a good paper trail, but I'm not sure what you mean by a phone call log.  I could document the dates/times I called Bank of America, but I think I'll need to just record my conversation with them next time so I have proof of them saying they will not send me any documentation.

In addition, I wrote a hand written letter to Bank of America explaining all of this and requesting documentation, so hopefully they do something with my request.

What a dumb situation.  If you don't pay taxes, the government will throw you in jail.  If you pay too much, the government doesn't say a word.