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posted Jun 4, 2019 7:15:36 PM

What should I do if I did not know I needed a 1099-C form to file my taxes back in 2016 and just now received a tax bill from the IRS?

I did not know that discharged debt on an equity line of credit was supposed to be reported as income. I never knew what a 1099-C form is and that I should have received one in the mail but never did. I recently received a tax bill from the IRS stating that I owe the difference on tax not paid on unreported income. How do I deal with this now since I cannot pay the amount owed by 02/01/2018?

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Expert Alumni
Jun 4, 2019 7:15:37 PM

Discharged debt is indeed considered as taxable income. And the IRS will find out the omission quickly as they receive a copy of your form 1099-C.

If you are unable, you should call the IRS at the number indicated on your notice and ask for a payment arrangement.

Please read this IRS document on payment plans:

https://www.irs.gov/payments/payment-plans-installment-agreements