Can a Debt collector take a debt and file a 1099 under your name as an income?

Question

Someone phoned my home saying they represent a company that says I owe them money. I've never had transactions with this company and I've never lived at the address they gave. But they had the correct Social #. Now they say, what I say doesn't matter they are filing a 1099 on me as income to me. How do I fight that?

Answer 1

If you settle a debt with anyone for less then the full balance, the creditor can and usually file a 1099 in your name and the US Gov't will consider it taxable income.

I have been told that if you are insolvent at the time you settle the debt (have more liabilities then assets) then you will not be responsibl;e and will not have to claim it as taxable income.

I did talk to a few tax attornies regarding it and the answers were all conflicting.


But the answer is yes, they can file a 1099 on you..

Answer 2

If you truly didn't incur that debt, then I would look into having your bank or someone investigate it for identity theft.
Or the company sound like they are trying to scam people by inflating their income and saying afterwards that they had to cancel or write off some debts. Then they might be able to write it off on their taxes.
Check with the better business bureau and report them. You can't really stop them from filing a 1099-C but you can dispute it with the IRS. Contact them and find out more.

Answer 3

If you negotiate with a creditor and pay them any portion of the debt and they forgive any part of it, they report the forgiven part to the IRS as income and you must report it on your taxes, and yes, you will receive a 1099.

Answer 4

This is not legal and just another unethical approach from a debt collector.

Answer 5

No, they can just sent them out on income earned.

Answer 6

I don't believe so, they are very limited on what they can do, other than harass you and call u nonstop, and eventually sue u