Anyone here send anyone to collections?

[LurkerPrime]

You should inflate the amount she owes you to an absurd amount due to interest and late fees. Then when it is about 20-100x the amount she owed you, forgive her of the debt and report this information to the IRS. She will have to pay taxes on the forgiven amount, and the IRS is much more vengeful than you could ever be. Sure you wont get your $500, but you'll have at least screwed her back.

 

[highland145]

You should inflate the amount she owes you to an absurd amount due to interest and late fees. Then when it is about 20-100x the amount she owed you, forgive her of the debt and report this information to the IRS. She will have to pay taxes on the forgiven amount, and the IRS is much more vengeful than you could ever be. Sure you wont get your $500, but you'll have at least screwed her back.

Remember something about the IRS not going after 1099-c (cancellation of debt). Might just be on mortgages.

EK.......

 

[EagleKeeper]

You are not required to report on Form 1099-C the following

<snip>

A debt is incurred for business if it is incurred in connection with the
conduct of any trade or business other than the trade or business of
performing services as an employee.

Unless you are the following - then the IRS will sit up

File Form 1099-C if you are:

1. A financial institution described in section 581 or 591(a) (such as
a domestic bank, trust company, building and loan or savings and loan
association).

2. A credit union.

3. Any of the following, its successor, or subunit of one of the
following:

a. Federal Deposit Insurance Corporation,
b. Resolution Trust Corporation,
c. National Credit Union Administration,
d. Any other federal executive agency, including government corporations,
e. Any military department,
f. U.S. Postal Service, or
g. Postal Rate Commission.​

4. A corporation that is a subsidiary of a financial institution or credit
supervision and examination by a federal or state regulatory agency.
5. A Federal Government agency including:

a. A department,
b. An agency,
c. A court or court administrative office, or
d. An instrumentality in the judicial or legislative branch of the government.
this box.​

6. Any organization whose significant trade or business is the lending of money

Under $600 is not reported and sometimes under 20% of the original debt.


So the way I read the above IRS statues, is that unless you are in the business of lending money you are not required create a 1099-C for unpaid bills.

So do not stiff any legal loans or the Government and you should not get a 1099C.
For illegal loans; a different type of enforcer may show up.

And if not a 1099-C is not required, it will probably be ignored by the IRS via comparing tax ID records to the 1099 and determine the type of business.

 

[highland145]

For me, losses $600 or less I don't have to report but must report everything over. The good Uncle doesn't want me to make bogus loans to myself and then write them off to avoid the taxes. Like I would ever.....:whiste:

 

[Anubis]

personally no, but my dad has for as little as 10$