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1099(c)'s issued post death
Hello Mark:
I was hoping some other "tax guru" would jump in, but I can see it's a job for me.The mere fact that Synchrony issued a 1099 does not establish that the taxpayer actually received the income so stated. If this came before a Tax Court judge, he would ask whether IRS had other documentation besides the 1099 to establish the receipt of income. No other documentation? IRS loses. Is there further documentation? Then you and IRS fight about it in front of the judge, and you'd eventually win if it came to that.But you want to avoid that fight with the IRS, who had no part in the issuance of the 1099. You can call Synchrony to ask to rescind the 1099; I see that going nowhere after many hours.I would file the return, declaring the income and filing a Form 982, claiming that it's not income because the taxpayer is insolvent. If IRS challenges it, you'll be able to talk to an auditor who, one hopes, will understand your argument.- John D. Faucher
On Thursday, March 2, 2017 2:00 PM, "jesseelaw@aol.com [cdcbaa]" wrote:
This is for the tax gurus. Former Client died last year. Former Client had federal backed parent plus loans for child as well as one outstanding credit card debt with Synchrony Bank. Up until former clients death, former client was current on debt payments.he decedents social security number saying the debt became uncollectible in the last year of former clients life. Never in 22 plus years of practice have I seen a 1099(c) issued to a decedent who was current while alive. That of course makes no sense as the debt did not become uncollectible until after death. Income attributed to the decedentes at death. Income after death belongs to the decedents estate. Here there were no assets subject to probate as everything was held in joint tenancy with spouse and life insurance was paid out to spouse.han the 1099(c) creditors) and accordingly no estate E.I.N. was ever obtained. 20 C.F.R. 674.61, 20 C.F.R. 682.402(b), 20 C.F.R. 685.212 make clear the student loans are discharged at death and no further collection can be pursued. Even if there were estate assets, the student loans are not collectable from the estate assets. Those regulations are completely blank however on tax treatment. It makes zero sense that the Department of Education cannot pursue estate assets but can then issue a 1099(c) to either the decedent or the estate. Direction to any regulations or references is appreciated.Likewise it does not compute that Sychrony Bank can issue a 1099(c) when the debtor was current at death. It likewise makes no sense from a probate perspective if a creditor can issue a 1099(c) to an insolvent estate. Estate administration could be finished and a 1099(c) comes in after payments to other creditors. Again any direction to a resource is appreciate.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868 (805) 497-5864 (Facsimile)
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