Notice from IRS about a 1099-C

[lord-patrick]

On December 5, 2016 I received a notice from the IRS that stated last years taxes did not match their records. Someone had forgiven a loan(something I knew nothing about) and that I owed $515 dollars, so I paid the money.

On this year's taxes, do i need to include this 1099-C business?

[MichaelL1 · Accepted solution]

The 1099C may have been some prior debt and if IRS asked you about it in 2016, it was for a prior year return. 

The 1099C should have been reported on that year, and IRS did this for you.  It does not go on the 2016 return.

Note:  IRS shares information with the states, so if it was taxed on the Federal return and you are in a State that has income taxes you will be a letter from the state also. 

[lord-patrick]

Thank you very much - I didn't think it was relevant but being a complete noob about taxes I thought it better to be safe than sorry. Thanks again.