Why are 1099c allowed to be late or never sent to the debtee? Is there no recourse for liability of unknown income?

[jbdizzyrice77]

This year I received one weeks after Jan 31 and three years ago never received one.  I was only notified by the IRS and after I had accrued interest for several months.  Then to boot the cancelling institution tried to collect the debt again some months later.  Are they penalized for things like this occurring if reported.  

[Anita01 · Accepted solution]

No, there is no penalty for the issuer or the IRS.  They don't send them until they are actually booking the forgiveness on their books, which may be a later time,  after all attempts to recover are exhausted.  If you know you have a debt you are not paying, it is up to you to find out if the company will be issuing a 1099-C to you, unfortunately.