TaxmannEA Posted February 27, 2018 Report Share Posted February 27, 2018 I have a client who had fraudulent charges on her credit card. She filed a police report and the card company removed the false charges. They have issued a 1099C showing the amount as discharged debt. I can't figure out how to exclude this from her income. I do not think that she should be liable as this was not her debt. Any ideas on how to proceed? Quote Link to comment Share on other sites More sharing options...
Jack from Ohio Posted February 27, 2018 Report Share Posted February 27, 2018 Form 982 with explanation. Quote Link to comment Share on other sites More sharing options...
RitaB Posted February 27, 2018 Report Share Posted February 27, 2018 Since I wouldn't know what option to check in part I of Form 982, I'd go to the line 21 worksheet, enter the amount there, and then subtract it on the same worksheet with an explanation. 4 Quote Link to comment Share on other sites More sharing options...
Roberts Posted February 27, 2018 Report Share Posted February 27, 2018 yeah I'd make an adjustment also on 21 and include form 8275 explaining why it was discharged. If you have a number from the police report - include it. 3 Quote Link to comment Share on other sites More sharing options...
SaraEA Posted February 28, 2018 Report Share Posted February 28, 2018 The IRS liaison has told us that if you zero out line 21, the side notations don't go with the efile. Always leave $1 on the line so the statements are sent. I have had my card compromised twice and never received a 1099C, nor has anyone I know. The card issuers routinely remove charges that don't belong to the cardholder. Are you absolutely sure that the C relates to the false charges, or did this client really have forgiven debt? 4 Quote Link to comment Share on other sites More sharing options...
TaxmannEA Posted March 1, 2018 Author Report Share Posted March 1, 2018 This was a card that the client used occasionally. When she got a bill, she knew that she hadn't made any charges and the locations where it was used were not in this area. She filed a police report, etc. but the card issuer balked, then agreed to cancel the debt when she cancelled the card. I have seen this type of thing before, but always after the fact. Thanks all for the advice. 2 Quote Link to comment Share on other sites More sharing options...
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