1099-C

[Pacun]

If both spouses received a 1099-C for the same amount, is there a mechanism to "nominee" half of it to the other? The IRS should not be collecting tax on the same amount twice?

Am not at the office, and am on the go today, but will be looking this up on Monday.

This is a good question but the creditor will send only 1 or 2 1099-C. One 1099-C will show the whole amount forgiven, if two 1099-s are issued, they should show only half of the debt forgiven. If there is a mistake with the amounts, the taxpayers have solve that issue with the creditor, not with the IRS.

But, let's say that a MFJ return omitted 9K. The following year they file single. Let's say the IRS will try to collect the tax owed in this case is 2K. The IRS (let's say) first assesses the tax on the husband but they are not able to collect. Then they assess the 2K to the wife. Both accounts owe 2K. Let's say that this year the IRS is able to collect 2K from both tax payers. How will anyone know that the other party paid if they don't talk to each other? If one party calls the IRS, the IRS employee will not be able to open the ex's account to check if the amount has been collected.

[easytax]

Consider taking "car" out of the question and replacing it with "house", "mortgage", etc. It lends a different perspective.

Most are correct here in understanding that a divorce decree, etc. (basically a contract of dissolution) might be enforceable between the parties but would probably need to -- go back to court -- for sanctions, enforcement.

However, the decree has no bearing, "weight" on the IRS aspect as far as a 1099 C (a forgiveness/right down, etc. from one entity to another) - it is a total and distinct occurrence.

By the way --- please - DON'T tell the attorney -- or your tax/accounting client how to handle (who's responsible, why didn't they do this, etc.) "legal" matters (or even allude to this type of information). I have knowledge of Bar Associations taking many type of professionals to task (practicing law without a license) for similar things. As noted in another post discussion here --- even if right and just an innocent opinion --- can be costly to defend against --- should they raise this question.

[SFA]

Good advice Easytax. We need to be careful not to cross the line into the legal field. There are plenty of horror stories and lawsuits that should remind us that there is a boundary line that should be respected. It is easy to get sucked into these bunny trails and end up being blamed for the outcome. Even so, sometimes, I am willing to take some risks and generally am difficult to intimidate.

When we discuss these topics, of course we don't have all the info. That's the fun of weighing in. It's not my client we are talking about! On this forum, there are no consequences for chiming in! (Except for the embarrassment of being dead wrong)

[JohnH]

But far better to be dead wrong here, where it costs us nothing, than to give wrong advice to a client. I've seen a few conversations on this forum where I was on the wrong side (Politics Forum Exempted), and avoided a mistake or two when it came time to deal with the situation with a client.

[easytax]

I can identify with the "Dead Wrong" --- just visit my post on the political section where I started a post referencing snopes.com.

And, yes, I've had associates fall into trouble with the Bar Association on what I mentioned above (not tax related associates - one of my other life's).

[MsTabbyKats]

Thank you for the advice Easytax....I guess we should keep our thoughts to ourselves, especially when lawyers are involved.

Personally....I try to avoid "lawyers as clients" because they can be so picky.

So...in this situation....the best advice is "you gotta work it out with the X...or pay the tax"

[Guest Taxed]

>>> Personally....I try to avoid "lawyers as clients" because they can be so picky.

I hear you, but you can have them as good clients if you know how to deal with them. At last count I have 8 lawyers as clients. They are self employed and just like the rest of us have to deal with the same issues. The advantage of having a lawyer is that I can e-mail them the cite of the law to a question and they appreciate it. Did I say that they are great source of referrals because they are centers of influence! Almost all my 1041 work comes from them.

I think we have a few lawyers on this board. Joelglib comes to mind.

[joanmcq]

The self-employed attorneys I've had as clients were the worst recordkeepers I've ever seen. I advised one (that I had done an OIC for) to just get a job for at least 5 years so she would stay in compliance. Either the attorney has to be successful enough to have office staff, or they should accept a paycheck!

[Guest Taxed]

Do you give them a template of how you want their business expenses? I usually do that with my Sch C clients that are recordkeeping challenged. Also I offer the services of my assistant at a reasonable rate of $15/hr to help them get organised.