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A: When a creditor sends you a copy of the IRS Form 1099, it means the creditor cancelled this debt and reports this to the IRS. Cancelled debt can be treated by the IRS as income that you would have to pay income tax on. However, there are several circumstances in which someone does not have to pay income tax on cancelled debt. One of these circumstances is when the debtor filed for bankruptcy. You still would have to inform the IRS that the debt was included in your bankruptcy filing. You or better your tax consultant would do this by filing Form 982 with the IRS. We see it every so often that receiving the 1099 notice causes confusion for our clients but also caused by their tax consultants who sometimes don’t know how to handle the situation. Bankruptcy attorneys don’t want to give tax advice and will leave it up to your tax consultant to give proper advice. But the bottom line is, you don’t have to pay income tax on debt that is discharged through bankruptcy and you need to let the IRS know about it through filing form 982 with your income tax return.
St. Charles Office
1861 Sherman Drive
St Charles, MO 63303
Phone: 636-916-5400
At Hwy 94 and Hwy 70.
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St. Louis Office
3470 Hampton Ave, Suite 101
St. Louis, MO 63109
Phone: 314-353-0834
Close to the corner of Hampton Ave and Chippewa. By appointment only.
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South & Jefferson County office
7321 S. Lindbergh Ave., Suite 222
St. Louis, MO 63125
Phone: 636-916-5400
Across the South County Mall.
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Florissant Office (North County)
1281 Graham Rd, Suite 300
Florissant, MO 63031
Phone: 314-921-1880
At North Hanley and Hwy 270.
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Belleville Office (St. Clair county)
2 Park Place Professional Centre
Belleville, Illinois 62226
Phone: 618-977-9560
On Hwy 159, next to Schnucks.
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Granite City Office (Madison County)
3600 Nameoki Rd, Suite 201
Granite City, IL 62040
Phone: 618-977-9560
Across Shop'n Save, by appointment only.
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