I'm claiming insolvency.
I called the IRS about 4000 times and finally was told that all I have to do is set up a sheet with my assets vs liabilities proving negative worth at the time of debt settlements. (credit cards)

They said not to send the 1099c's with my taxes.(good thing cause the creditors haven't sent them to me, but I know this income must be reported)

They also said not to send any documentation. Just a sheet with the assets and liablities.

Is this true?

What do I need to send? Just my tax form with the 982 and the asset liability sheet? Or do I send more?

I'm going crazy over this. The IRS tax helpers confuse me. And they aren't much help. I can't afford a cpa to do this for me. I HAVE to do it on my own. I'm obviously financially strained. What happens if I get audited and don't have all the proof of things? Do I just have to pay the taxes they state? Or will I go to jail? I'm trying to the best of my ability. And I'm not withholding anything from them.

Help.:confused:

Just send the Form 982 and the asset liability sheet. If the figures make sense (the IRS WILL criss-check against your credit report), then the IRS will take it at face value and adjust your taxes accordingly.

Do not worry about going to jail. That's only for people who make an active attempt to hide income and evade taxes.

I am doing the same thing. I am doing my taxes through Turbo Tax, but I believe form 982 is noted and it appears to guide me through. I settled about $15000 in debt, however, I still have about $38,000 left and have no equity in my home, no car of any value (I still owe more on them than what they are worth) and I have no other assets. Once I have gone more through Turbo Tax (they are down right now), I can give more information. I have received 2 out of the 3 1099-C forms, one of these today.. so you may want to make sure you claim the right amount and wait for the form. Your creditors should send you one and they have until 1/31/09 to get those out to you (I think).
Good luck and if I found out anything more, I will let you know.