CP2000 Problem

[marquiri]

This has probably been discussed on here, but I'm just looking to see if anyone has any feedback. About 15 years ago I co-signed on my ex-wife's student loan. Subsequent to our divorce, she settled the loan, and the IRS is now chasing me for payment on the amount from the 1099-C that was issued (from 2016). The lender has told me repeatedly (on at least 8 occasions) that there was never a 1099-C generated in my name. They have sent me copies of the 1099-C that was sent to her. The IRS, however, shows that the 1099-C income was electronically reported to my social security number, and they will not accept the 1099-C that I sent them in the borrower's name. The lender has indicated that because the amount of the forgiven debt is over $10,000, they report it to the IRS as income under all social security numbers involved in the loan. There has to be some way for me to be able to resolve this, as I received no benefit from the settlement, nor did I ever sign off on the settlement. Does anyone have any advice?

[Elrod]

Locate your closest IRS office....Take every tax return and other records involving the situation...Resolve the matter at that IRS office.

[marquiri]

I was thinking about trying that. The people I've spoken to over the phone have not been helpful at all. They claimed that even by giving them a 1099 in the borrower's name, that could be a 1099 from anything, not necessarily the loan in question. The lender hasn't been particularly helpful either.

[Jack from Ohio]

Since you co-signed the original loan, you are equally responsible for the amount on the 1099-C.

There is no way to avoid it.  Pay it and sue your ex for her share, in small claims court.

First hand experience here, so I know my advice is sage.

[Terry D EA]

I got to agree with Jack. You co-signed the loan your stuck. Same as any other loan that you would co-sign. From your post "The lender has indicated that because the amount of the forgiven debt is over $10,000, they report it to the IRS as income under all social security numbers involved in the loan." I also agree with the ex having to pay half regardless of what method you use to make that happen. 

[Max W]

I am not a gatekeeper, but marquiri does not appear to be a tax pro as he doesn't seem to realize that a 1099-C, being a cancellation of loan debt, beomes income to be reported on his tax return.  The amount would have been the unpaid amount after the settlement.   This means that the ITS is collecting from any signer on the loan.  What if i there are 3 signers?  Does the IRS collect 3 times for the same amount.

One possible solution:  If the loan is not a gov't backed loan, and he qualifies for indebteness. form 982 can be sent back with the CP2000.  

[marquiri]

The thing is, I never received a 1099-C. The only thing I ever got was a notice from the lender that the loan had been settled. If I had received a 1099, I would have addressed it back in 2016 when this arose. Lender has told me repeatedly that they did not generate a 1099 in my name. IRS shows that they reported electronically.