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Can person A file a form 982 for relief for debt from 1099-C student loan debt?

Clermont, FL |

Can person A file a form 982 for 1099-C induced tax debt? Can they still file married filing jointly? Can person B be held liable in any way? I've researched the heck out of this and I think person A can file a form 982 claiming $55,000 student loan debt – the $5,000 asset making them insolvent and I think they can still file jointly and I think person B cannot be held liable for any of the tax debt. Not sure on what happens if the loan comes back. Maybe they would be able to file an amended tax return for 2013, taking off the 1099-C in which case they would then have a refund coming? I want to be sure bc the last thing person A needs is to owe the IRS. Person A’s debt was written off BUT they are still in the “3 year monitoring period” meaning if they earn more than $15,000 in a year from employment over the next 3 years from the date of the discharge the debt comes back. If they take out student loans the during that time the debt comes back. So really it is like a conditional discharge bc there is a whole list of stuff that COULD occur and the loan would be reinstated. Person A doesn't want to pay the taxes on a student loan that could be reinstated. Here's the scenario: 1996-2007 person A accrued student loan debt w out a co-signor (in Maryland and Florida) 2005 person B buys a house in their name only. 2009 person A and B get married (in Tennessee but continue to reside in Florida, both equitable distribution states unless in TN you put it into a trust making it comm.. prop.) 2009-2012 person A and B filed married filing jointly 2010 person A becomes disabled and defaults on loans 2013 person A gets $55,000 in student loans written off 2014 person A gets a 1099-C, person B fears that they will somehow be liable AND that a lien can be placed on person B’s house bc it is a marital home. I hope my questions are clear. I have gotten a mixed bag of answers from Tax Attorney's, Bankruptcy Attorney's, Family Law Attorney's, CPA's, Accountants...who is correct? BTW, as of a few weeks ago the IRS shutdown their tax department (maybe an Obama cutback??)

Attorney Answers 2

Posted

This forum is for simple and general questions, not a substitute for legal and accounting advice. You have surveyed professionals of different disciplines and gotten different answers. You have also done your own independent research. It is time for you to decide what is right. To be safe, why not file separately during the conditional discharge period?

Posting questions anonymously and receiving general answers do not substitute for consulting with an attorney licensed to practice in the jurisdiction in which you live. Answers posted here by Kevin C Gleason are only intended for general education of the public on legal matters. Please consult a qualified professional before deciding what to do about your situation.

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Posted

bc is they generally file jointly wouldn't the IRS frown upon them suddenly filing married but seperate?

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Posted

*if*

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Posted

I guess I could file it married filing jointly and include a letter as to how and why I filed it the way I did....can you send certified mail to the IRS? I'm guessing there is a way....

Kevin Christopher Gleason

Kevin Christopher Gleason

Posted

I have never seen the IRS raise a concern about persons who file jointly sometimes and file separately at other times.

Posted

Your questions are way too complicated to be answered in this general forum. You need to sit down and meet with a CPA or tax attorney so they can review your entire situation.

The above information does not establish an attorney-client relationship and is based upon the limited information the questioner provided. Unless you have signed a representation letter and paid a retainer, you are not a client of the firm. You should seek legal advice from an attorney in your area if you want a full legal opinion in this matter.

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Posted

I have sat down with all of the "experts" that I mentioned above, from family law attorney, to bankruptcy attorney, to tax attorney, to CPA, to Accountant and I am getting mixed information from them. Family Law attorney said, well you can always go back to loan company and get loan reinstated, then you wouldn't have a 1099-C (not helpful), Bankruptcy attorney told me it was "Unamerican" to not want to pay my taxes (glad he does bankruptcy and not tax :P Tax Attorney said file joint bc you always do and know that they cannot touch the house bc it is not in your name and unless you get divorced and even then up to a judge, do you get some sort of special rights to the property. CPA and accountant admitted that the marital law and real estate law was out of thier fields of profession but both said that we could not file married filing joint. I guess a court of law will have to decide this one :'(

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Posted

Oh and not a SINGLE expert touched the "what happens if the loan debt comes back?" question :(

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Posted

I called the legal department of the student loan company and asked "Why are you sending me a 1099-C for debt that is conditionally discharged?" to which they replied, "It is not a conditional discharge. You are in a monitoring period." WTH?! THAT is conditional no? if yes, why 1099-c now and not AFTER "monitoring period?"

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Posted

Funny this site advertises: "Get free legal advice from top-rated lawyers" and still CYA's w "The above information does not establish an attorney-client relationship and is based upon the limited information the questioner provided. Unless you have signed a representation letter and paid a retainer, you are not a client of the firm. You should seek legal advice from an attorney in your area if you want a full legal opinion in this matter. " So back to the general not "full legal opin" Can person A file a 1099-C and not include the "martial home" of person B's on the Form 982? I am trying to do what is right but it is hard to do what is right when you are getting so many mixed opinions from all the experts :P

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