What to Do When a Creditor Refuses to Provide a 1099-C

When a creditor cancels or forgives a debt of $600 or more, they are generally required to issue a Form 1099-C, which reports the amount of the canceled debt as taxable income to you. However, there are instances where creditors may fail to provide this form. Here’s what you can do if you find yourself in this situation:

1. Understand the Importance of Form 1099-C

Form 1099-C is crucial because it informs the IRS about the canceled debt, which is considered taxable income. Without this form, you might face complications in accurately reporting your income and could potentially face penalties.

2. Contact the Creditor Directly

Reach out to the creditor and request the 1099-C form. Explain why you need it and the potential tax implications of not receiving it. Sometimes, creditors may delay or overlook issuing the form, and a direct request can resolve the issue.

3. Document Your Efforts

Keep a record of all communications with the creditor, including emails, letters, and phone calls. This documentation can be useful if you need to prove to the IRS that you made a good-faith effort to obtain the form.

4. Report the Canceled Debt on Your Tax Return

Even if you do not receive the 1099-C, you are still responsible for reporting the canceled debt on your tax return. Use the information you have about the debt to estimate the amount and include it in your income.

5. Consult a Tax Professional

If you are unsure about how to proceed, consult a tax professional. They can provide guidance on how to report the canceled debt and handle the situation with the IRS.

6. File a Complaint with the IRS

If the creditor refuses to issue the 1099-C, you can file a complaint with the IRS. The IRS can then follow up with the creditor to ensure compliance with the reporting requirements.

7. Stay Informed About Your Rights

Understanding your rights and the creditor’s obligations can empower you to take the necessary steps to resolve the issue. The IRS provides resources and guidance on handling canceled debt and the 1099-C form.