Comprehensive Creditors Rights Representation Throughout the State of Indiana
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Recent News
Garnishing the Wages of a Subcontractor
Garnishing the Wages of a Subcontractor: A Case Review of Indiana Surgical Specialists v. Helen Griffin and MDS Courier Service, Inc...
CLIENT ADVISORY
On September 4, 2012, Judge Louis F. Rosenberg, of Marion County Circuit Court issued an order shortening the notice and comment period for proposed amendments to Marion County Small Claims rules. The comment period began September 4, 2012, and will close on October 5, 2012...
CLIENT ADVISORY
Effective July 1, 2012, Title 750 of the Indiana Administrative Code will reflect amendments to the dollar amounts in the Uniform Consumer Code, home loan practices, and bankruptcy exemptions....
1099-C Discharge of Liability
Upon receiving a form 1099-C Discharge of Liability in the mail, an individual may believe that the debt owed has been discharged by the creditor and is no longer owed. When a creditor chooses to discharge a debt, they must report this information to the debtor and the IRS by filing a 1099-C form. The debtor, in turn, is required to report the discharged debt as gross income. 26 U.S.C. § 61(a) (12).
When a creditor files a Form 1099-C it merely creates a prima facie showing that the debt liability is discharged. This presumption can be rebutted if a creditor can show that the intent in issuing a 1099-C Form was for any reason other than to discharge the debt liability. The presumption can be rebutted if a creditor can show that the Form 1099-C was filed only with the intent to comply with 26 C.F.R. § 1.6050P-1, which outlines eight events that trigger the requirement to file a 1099-C form, and not for the purpose of discharging a debt liability. Merely receiving a Form 1099-C does not itself legally discharge a debtor from the debt liability. Leonard v. Old National Bank Corp., 837 N.E. 2d 543, 545-546 (Ind. Ct. App. 2005).