Taxes

Taxes on Debt Settlement

Posted on Jun 26, 2011 | 12 comments

Why must I pay Taxes on Debt Settlement? The concept, although quite simple, can actually be very confusing for consumers, especially because of false information offered by some debt relief sales people. The bottom line: Unless exempted by the insolvency rules or another exemption, you will owe taxes on debt that has been forgiven by a creditor. In this article I assume that none of the...

Debt Negotiation – Applying the Insolvency Rule to a 1099-C Tax Liability

Posted on Aug 21, 2009 | 3 comments

Insolvency Rules If I enroll into a Debt Negotiation program to settle my debts with my creditors, will I have to pay tax to the IRS? This is a daily question I am asked during my consultations with consumers. The answer is that it depends on your situation. Before I review a few situations to illustrate when you may or may not be required to pay a tax on forgiven debt, let me make it very...