Can I do something about 2016 Chase 1099C issued for student loan debt setteled in 2013? Already set up tax payments but found docs to prove this.

[april-daniellefu]

Responded to IRS once I received notice and set up payment as I found the 2016 1099C. However I discovered through documents the debt was settled 2013 and Chase held the account open and empty for 3 more years with no activity. The manager there won't call me back. Can they do this? Can I file a claim with the IRS and my state to recover funds I've paid in back tax?

[DanielV01 · Accepted solution]

You can try.  For a situation like this, usually you have to write in a letter requesting a reconsideration of Audit.  To get the right location for where you will send the information, you will want to call the IRS and see if they can provide you with specific instructions.  Then you submit your documentation to show that the reported cancellation of debt was misapplied and should have been the prior year.  One word of caution:  it takes a while for a situation like this to be considered and (maybe) resolved.

Thus, if you do go this route, I would recommend you continuing to make any installment payments you are currently required to make until you hear otherwise.  That way, if you don't get the reconsideration granted, you do not pay more than a stamp and a phone call or two.