confused about 10-99

[misanthropic]

original creditor sold my debt to a collection agency, i paid the collection agency what i owed, and now i'm getting a 10-99 in from the original creditor..
i honestly had no idea what my balance was on the original credit card, the collection agency said i owed 1098.36, but they would accept 549.18 to settle it. so i paid that amount.
but the 10-99 says that the debt forgiven was 731$ (and i know my card wasn't over 1700$)
the original credit card was citibank (a home depot card), and the collection agency was northland group,inc. if that helps any..
can they legally send me a 10-99 since they sold the debt?

[BigJohn]

Are you sure Citibank sold the debt?

Did you make the settlement to Citibank or to the new creditor?

[magyar123]

The difference between $731.00 and $549.18 is 181.82.
The total debt figure that the collection originally gave you ($1098.36) was probably the amount you owed Citibank. Once they sold it to the collection agency that collection agency obviously added fees totalling to $181.82.

[misanthropic]

well i was going to say yes, i was pretty sure that it's a debt collector (because that's what it says on the bottom of the paper that was sent to me offering the settlement) and it even have different account numbers (one for northland group, and one for the original citibank account)

but...
it says make checks payable to 'citi' (i paid online)

so i guess it really wasn't a 'debt collector' that bought the debt?

and if thats right, then my balance says 1098.36, i settled for 549.18, where are they getting the 'forgiven debt' of 731.56 from?!

[magyar123]

well i was going to say yes, i was pretty sure that it's a debt collector (because that's what it says on the bottom of the paper that was sent to me offering the settlement) and it even have different account numbers (one for northland group, and one for the original citibank account)

but...
it says make checks payable to 'citi' (i paid online)

so i guess it really wasn't a 'debt collector' that bought the debt?

and if thats right, then my balance says 1098.36, i settled for 549.18, where are they getting the 'forgiven debt' of 731.56 from?!

Additional fees, interest, who knows.

[treehugger1]

There is another post around here somewhere related to 1099's for forgiven debt. You should have an accounting of principle and intrest/fees. I'm no accountant, but I would guess that you are only responsible for forgiven principle debt. How this determined is beyond me. I wish I had more to tell you.

[magyar123]

Its most likely wrong. They really have no worries about issuing incorrect 1099-C's. But you just file a corrected one with a note to the IRS stating the one issued is incorrect and file your proof.

Google incorrect or wrong 1099-C and you will good hits on this.

There is a true funny story about how the commissioner of the IRS was sent a 1099-C for one million dollars by ex-employee of some JDB and they didn't believe him and refused to correct it. LOL... He actually had to file it with his tax return along with a note stating it was not his debt.

And also that bozo who just became Treasury Secretary, and another that is to become some other Secretary.