Filed Bankruptcy in 2010. Rec'd 2 1099-A's in 2012. IRS liability is 70,000 Is there a program to reduce debt disabled person.

Asked over 1 year ago - Las Vegas, NV

I am a disabled veteran. We filed for BK and home was foreclosed in 2010. We rec'd 2 - 1099a's in 2012.
Is there a program that will reduce the amount owed to I.R.S. Also can a 1099-A be converted to a 1099-C

Attorney answers (4)

  1. Henry Daniel Lively

    Contributor Level 20

    7

    Lawyers agree

    Answered . If the 1099's relate to the cancellation of debt and the debt was discharged in your bankruptcy it is not taxable income under Section 108 of the Internal Revenue Code. If the 1099's are for other income or miscellaneous income, then it is included in taxable income. You may be eligible to submit an offer in compromise or be put on currently non-collectable status if you owe tax. If the 1099's are in error you can ask the issuing party to correct them.

    H. Daniel Lively, Esq., LL.M., CPA Certified Tax Specialist, CA Board of Legal Specialization dlively@... more
  2. Richard Edmund Hawkins

    Pro

    Contributor Level 16

    5

    Lawyers agree

    Answered . This is a tax question, not a legal question.

    Debt discharged in bankruptcy is not taxable, although the lender may be obligated to file the 1099. Also, if you were "insolvent" by IRS standards (owing more than your total assets), you likely qualify for relief; there is a specific form for this.

  3. Taylor L. Randolph

    Contributor Level 4

    4

    Lawyers agree

    Answered . You'd want to seek a CPA that can file the return and include a Form 982. This is an information form that tells the IRS this is non-taxable income. Really common these days! Good luck.

  4. Peyton Hunley Robinson

    Contributor Level 12

    4

    Lawyers agree

    Answered . You have received plenty of advice from the other attorneys, but it does not look like you were provided a link to the Offer in Compromise program. I do not know if it will work for you to reduce your tax debt, but it is worth checking out -- http://www.irs.gov/Individuals/Offer-in-Comprom...

    This answer or response should not be considered legal advice, and does not create an attorney-client relationship.... more
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