filed 982 and IRS writes back that TP must be insolvent

[schirallicpa]

And the TP was insolvent.  

It was a classic IRS response - TP must be insolvent.  Here's your voucher to pay up.  Well - no kiddiing IRS.  If he weren't insolvent, he probably wouldn't have a 1099C!

I've never had the IRS not accept form 982 - not that I do a whole lot of them.  Should I just send them a copy of the 982 asset and liabiltiy worksheet thats in the Pub?  

What happened in this case is the TP got a notice in 2016 that his 2013 tax return was changed for 1099C that he says he never got.  The 1099C was for almont 13K.  And I know the guy and I know he had nothing then after getting divorced.  No house, only a junky truck and a motorcycle.  Both worth less than the $13K on the 1099C.  So I filed the 982.  now the hard part is going back and finding what he really did owe on things 3 years ago.  

Wondering if anyone else has had trouble filing 982

[Tax Prep by Deb]

I have done several and not one has been challenged.  I will not file it just on the opinion they are insolvent.  Nor will I do the worksheet for them.  I send it home with and reviewing it with them and tell them to get a separate envelope and that everything they put on the form must have documented proof in case of questions.  I don't ask to see the proof, I just make sure they have kept it then I go over everything with them and finally make the determination.  In my area it's not that difficult as most have to do with either foreclosures, short sales, or loan modifications.  The property values here took a tremendous hit and are just now recovering, so I was pretty sure that if a home was involved they were insolvent.