Had settled for lessor amount with creditors now receive letter from IRS stating need to file 1099-c because settling for lesser amount means I made profit, and now owe $900.00 What the heck?:eek:

Can this be so? And if yes what could be time frame to file the 1099-c .


Thank you;

Yes.

You must report as income, the difference between the total debt, and the amount settled for if it is over $600.00.

The 1099c is required to be reported to the IRS by the creditor, which is how they know about the income not being reported on your tax form.

Here is a link that outlines all the details.

http://www.franklindebtrelief.com/1099-c-faqs.html

I'm not sure how to answer your question or how to use this site. But I am having the same trouble you are we settled a debt for less , but didn't realize would get a 1099-c we have already had our taxes done before we received the 1099 will they hold our refund.
Thanks