Under an IRS rule change effective in November 2016, creditors are no longer expected to issue a 1099-C form merely because debt has gone 36 months without a payment. If you receive a 1099-C for a debt you were not aware was discharged, clarify the status of the debt with the creditor.

What to do if you receive a 1099-C?

If you receive a 1099-C for a debt you were not aware was discharged, clarify the status of the debt with the creditor. If they are following the old rule, request that they rescind the 1099-C under Internal Revenue Bulletin 2016-48, T.D. 9793. Rescinding the 1099-C will alert the IRS that it was issued in error.

What happens if you rescind a 1099-C form?

Rescinding the 1099-C will alert the IRS that it was issued in error. If the creditor will not rescind the form or confirm the debt is forgiven, you will need to use the IRS dispute process outlined in publication 4681 to show that no taxes are owed.

Can a 1099-C form be used for paycheck protection?

In a change for this tax filing season, the IRS told lenders not to send taxpayers 1099-C forms for the forgiveness of debt under the Paycheck Protection Program. The program often referred to as the PPP, provided forgivable loans to businesses to help them survive during the COVID-19 pandemic.

Is there Statute of limitations on filing 1099-C?

Statutes of limitations vary by state and by type of debt, but creditors are not required to file a 1099-C at that time since they can continue to try to collect on debt indefinitely.

What is the sub status of CitiDirect be?

CitiDirect Status CitiDirect Sub-Status CitiDirect Sub-Status Description CB Rejected Specific Service offered by Debtor Agent Due to originator bank account configuration. CB Rejected Specific Service offered by Creditor Agent Due to beneficiary bank account configuration.