Received cancellation debt form. didn’t pay debt because paypal charged me 2x for item&paid seller 2x&refused to go to seller. Not my debt/Shouldn’t be taxed/What 2do?

[Anita01]

The IRS receives a copy of the 1099-C and will be expecting to see the income on your tax return.  If they don't, you will receive a letter from them billing you for the tax.  At that time, your only resolution would be to explain the situation to them and see if they will remove the billing.  You should gather whatever evidence you have of the double billing and double payment to the seller if you cannot convince PayPal to amend the 1099 to zero.