Community Banks: Reviewing and Rethinking the 1099-C
Author: James D. Goeller.
Source: Volume 27, Number 02, November/December 2013 , pp.55-59(5)
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Abstract:
Filing Form 1099 usually does not have any economic consequences for the issuer. However, in the recent Reed case, a bankruptcy court found that issuing a Form 1099-C is an admission the creditor has discharged the debt and precludes any subsequent rights to collection or repayment. In light of the bankruptcy court’s ruling in Reed, lenders should review their position and policies with respect to the issuance of Form 1099-C as well as the changing nature of Form 1099-C over the years.Keywords: In re Reed; discharge of indebtedness; Treas. Reg. Sec. 1.6060P-1(b)(2); INFO 2005-0207; INFO 2005-0208
Affiliations:
1: Crowe Horwath LLP.