1099C for bankrupt client

[TaxmannEA]

A client just presented me with a 1099C showing around $18K of cancelled debt. This was a loan that was discharged in a Chapter 7 bankruptcy. The date of cancellation is shown as 0/00/0000 and the bankruptcy box is not checked. I'm trying to show this as non-taxable, but I seem to be too fried to get it thought out. Any ideas?

[Terry D EA]

The question is, was/is your client insolvent? I handled one of these a few years back. It would be in your client's best interest to obtain all of the bankruptcy documents from the court. That will show the discharge of this debt even though the box isn't checked on the 1099C. IF it is included in the documents, then file it as non-taxable based on the bankruptcy filing. Your client might get a notice and have to produce proof. My client got a notice plus a proposed adjustment to his tax liability of that year. We presented the court docs and it was resolved and to my surprise, it was done very timely by the IRS

[TaxmannEA]

Thanks Terry. The client is dropping off the documents. I guess that I just get frustrared by banks, ets. who don't seem to know or care about processing these forms in a correct manner.