5791Re: [tips_and_tricks] 1099 form from Credit Card negotiated settlement
- May 14, 2004I'm just a simple lad, but mathmatically and logically you can't say that a reduction of a negative is the same as an increase of a positive.A debt reduction means that you have less debt and can spend the money you already have on other things besides that debt. It doesn't create more money to spend!No increase in money, no increase in income. Do the math.Hope this helps
birdlinski1948 <birdlinski1948@...> wrote:
We received a letter from the IRS for a proposed amending of our 2002tax years. The amended action they propose states that a debt was forgiven and that we should have made an adjustment in our earned imcome for that year to reflect a $5K more on our earnings. This was due to, a debt we had negotiated for a reduced amount. How can they state a debt was forgiven when it was negotiated for a smaller settlement. How can they say that we enjoyed 5K more income when we did not receive any monetary value, such as, checks, FRNs etc. Wouldn't the negotiated settlement be considered a new contract? Anyone have something that I can send to the bottom feeding IRS to stop them in their illegal tracks of trying to coerce this from me?
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