1099-C (Cancellation of Debt) and 14039 (Identify Theft Affidavit) Form

[kytran620]

Hi,

I received a 1099-C form from Mountain Summit Financial regarding to $1000 loan under my name that was forgiving. Since I never apply a loan with them, I suspect someone has stolen my ID. However, when I looked at my latest credit report, I don't see any account with them. Since Mountain Summit Financial does not have many good reviews, I don't know if they are trying to pull a fast one on me or what.

IRS says do not file 1099-C as a result of ID Theft (top of page 3, https://www.irs.gov/pub/irs-prior/i1099ac--2021.pdf). So should I file a 14039 form (Identify Theft Affidavit) instead? Also can I do this with my regular tax return using turbotax? Thanks!

[JamesG1]

Yes, file IRS form 14039.  An IRS tax document was used and it may have been reported to the IRS.

IRS Form 14039 is not a form in TurboTax but can be found here and in this TurboTax Help.

[maglib]

Top of page 3 is not what this means.

First sorry this happened to you.  Did the 1099 have your SSN on it, that is important.  If it does, you will probably have to report it and then report that it is not yours. Let me know and I will explain more in depth below.  

If you think this was a fake 1099,  to confirm you may want to confirm with the IRS in the future to make sure it was NOT filed.  You could get a copy of your tax transcript.

How can you get your tax transcript?

There are two main ways get your tax transcript from the IRS:

1. Request your tax transcript online. This is the fastest way to request your transcript.
   1. Go to the Get Transcript
   2. Scroll down to the "Request Online" section and click the "Get Transcript Online" button.
   3. Register for the service and provide identifying information, including your social security number (SSN), date of birth and filing status. You'll need access to your email account, and you'll also need to supply account information from a financial product or service like a credit card, mortgage or home equity loan.
2. Request an IRS transcript by mail. Transcripts usually arrive in five to 10 calendar days.
   1. Visit the same Get Transcript site used for requesting your transcript online. Click "Get Transcript by Mail" under the "Request by Mail" section.
   2. You'll need your SSN or Individual Tax ID Number (ITIN), birth date, street address, and postal code.
   3. Transcripts will arrive at the address the IRS has on file for you so if you have moved you will need to change your address with the IRS before requesting the transcript.

Assuming that the 1099-C does have your SSN on it and just in case, it's best to have it on your return, report it and then you can easily negate it.  Go into turbo tax.  Regardless Mortgage Debt may not even be taxable income so it won't cost you but, I know you don't want to show it.

If you need to enter it because it has your SSN, you can enter it as OTHER INCOME and enter a 1099MISC for the 1099C then enter another 1099Misc as a negative number and identify it as FAKED 1099C RECEIVED.  I would also contact the local PD and report this as potential ID theft and keep all this documentation. This way if ever audited you have it documented. .

I hope I was helpful.  I do not work for turbotax.

"Mortgage forgiveness debt relief act

Due to the magnitude of the real estate market collapse that began in 2007, Congress passed the Mortgage Forgiveness Debt Relief Act in 2007. For calendar years 2007 through 2020, you can exclude up to $2 million in forgiven mortgage debt if you were married and filing jointly—up to $1 million for other filing statuses. This also applies to debt that was discharged in 2021 provided that there was a written agreement entered into in 2020. This exclusion also applies to mortgage debt forgiven through a mortgage restructuring or in connection with a foreclosure.

The Consolidated Appropriations Act (CAA) was signed into law on December 27, 2020 as a stimulus measure to provide relief to those affected by the pandemic. The CAA extends the exclusion of cancelled qualified mortgage debt from income for tax years 2021 through 2025. However, the maximum amount of excluded forgiven debt is limited to $750,000."

[kytran620]

Hi Maglib,

Thanks for your lengthy reply. The 1099-C from Mountain Summit Financial does contain last 4 digit of my social security number. Does 1099-C suppose to show the whole social? or just the last 4 digits? I also found another person that received a 1099-C from them for no reason as well (https://dirtyscam.com/report/summit-mountain-financial/#comment-57509).

I do have access to IRS tax transcript online. But what am I looking for? By the way, I didn't file my return for 2021 yet

I did call IRS earlier today but couldn't get through the line.

I do not have any outstanding mortgage since many years ago.

Thanks again for your help!

[kytran620]

Also my TransUnion credit report does not show any account with Mountain Summit Financial. That is why I also suspect they might be trying to pull some kind of scam on me

[ThomasM125]

It would be normal for the 1099 to just show the last four digits of your social security number. On the IRS transcript, you would look for the income amount reported on the 1099 form.

You shouldn't report the income on your tax return if it is not valid.

[maglib]

DId you ever have a mortgage forgiven or did you pay it in full?  If you have full access to your transcripts see if their is a 1099 received by the IRS from them, normally 1099's are not yet in the IRS database yet. They may have bought your mortgage at some point so it may be legit.   Last 4 may be correct.  Loan forgiveness may not be on your credit report, means nothing as they may not have been the lender but bought it after the fact.  I would contact the police to be safe and see if they would contact them, possibly they may say who to go to, as you don't want to be contacting the company to find out they are looking to get more of your information and this is just a phishing scam.   It is next to impossible to reach the IRS and/or get a transcript, they are completely behind. I've been trying for weeks to get through myself and to get my own transcript as I'm missing some files. At this point.  If you never had any loan forgiveness, I'm betting this is just a scam.  Authorities first is safest bet though.  So horrible how this world has become targeting innocent people daily.

[kytran620]

In the past, I have only used IRS return transcript. I just realized I was looking at the wrong transcripts for reported 1099. (I was looking at Account & Record of Account transcripts). 1099 should be under Wage and Income Transcripts which I did not see a 1099-C from Summit. Thanks!

[kytran620]

My mortgage was paid in full more than 15 years ago. I was able to look at my Wage and income transcripts from IRS for 2020 & 2021 and didn't see a 1099-C from Summit Mountain Financial for $1000. Since I also don't see them from my credit report, I can only assume this is some kind of phishing scam or tax write-off scam from them.  In that case, I don't think I will report this questionable 1099-C from my return.  I will just submit my return via Turbotax. I will follow up with a 14039 form (with a copy of this 1099-C) via mail. Does this sound like an ok plan?