Pacun Posted June 5, 2015 Report Share Posted June 5, 2015 Client was forgiven about 30K by credit card companies. The IRS wants to have worksheets showing that client was insolvent on the year her debts were forgiven. Is there anything in ATX or any worksheet that I can send to the IRS? I think I will also include a letter explaining the situation. My clients makes about 15K each year and has only a car as asset. Thanks in advance. Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted June 5, 2015 Report Share Posted June 5, 2015 Page 9 of pub 4681 has an insolvency worksheet. Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted June 6, 2015 Report Share Posted June 6, 2015 (edited) Be certain that the client knows that ALL assets must be shown on the worksheet. The numbers must be what was in place on the day BEFORE the account was written off. I had one rejected for $982 in debt write off. $132 in tax. In addition, the client must be able to document all his debts shown on the day before the account was written off. I have heard of IRS asking for documentation.Including a letter will not help. Just send the accurately filled out insolvency worksheet and wait for the IRS to respond. Edited June 6, 2015 by Jack from Ohio 2 Quote Link to comment Share on other sites More sharing options...
Pacun Posted June 6, 2015 Author Report Share Posted June 6, 2015 Thank you. Quote Link to comment Share on other sites More sharing options...
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