February 10, 2008

The Old Phony 1099-C Bogus Acct Trick!

Filed under: Identity Theft

14 year old ID theft, charge off, Junk debt, the filing of a bogus 1099.

Rob

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Hello Rob,

A debt resulting from identity theft isn’t legally collectable and won’t result in discharge of indebtedness income to a victim of ID theft. 

In Zarin v Comm’r (916 F2d 110 – 3rd Cir, 1990) it was decided that $2,935,000 cancellation of indebtedness wasn’t taxable income for the consumer because the debt itself was illegal. 

Thanks for the questions and hope this helps.

Paul

This author is not an attorney or an accountant and this information should not be considered legal or tax advice.  Please consult an attorney for legal advice.  Please consult an tax professional for tax advice.

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