It is tax season again. And if you have been fighting debt collectors, they may have a dirty trick in store for you.
Often debt collectors will consider any payment to you as income for you. If you sent the collector a w9 when you settled with them, there is a good chance they will send you a 1099c at the end of the year.
Another situation could be that they write off the debt and forgive the debt. They then report the debt fogivenees as income to you. The debt collector reports the debt forgiveness to the IRS so they get their business loss… then you get a 1099c!
Here is what I do when I get a 1099c from a debt collector:
Let me know if you have any questions. I am always here for you even if I dont have a recent post.
Fight the essential fight, Boiler