Wednesday, September 06, 2006
Get in trouble with the IRS following Creditwrench advice
In a recent discussion I had with CREDITWRENCH CEO Billie Bauer, Mr. Bauer made the following comment:
"one of my goals for this and the upcoming years is to inform the greatest number of consumers possible about the(tax)law and how to inform the IRS when creditors or collectors violate the law by failure to comply".
What that means is anyone foolish enough to follow the information provided by Creditwrench CEO Billie Bauer will shortly find themselves facing penalties, interest, bank levies, garnishment, and possible jail time, courtesy of CREDITWRENCH CEO Billie Bauer.
A case in point.
Today, in regards to a creditor issuing the required 1099-c on a discharged debt, CREDITWRENCH CEO Billie Bauer stated:
"if no 1099 is issued by the creditor then no tax is collectable by the IRS".
The truth is, and the Internal Revenue Code makes very clear, you are responsible to report all income from any source, including the discharge of indebtedness, to the IRS irrespective of whether you receive the necessary forms.
Here is how the United States Tax Court ruled on this exact issue just this past March.
Petitioner claims he did not receive a Form 1099-C from American Express discharging the debt. “The moment it becomes clear that a debt will never have to be paid, such debt must be viewed as having been discharged.” Cozzi v. Commissioner, 88 T.C. 435, 445 (1987). The nonreceipt of a Form 1099 does not convert a taxable item to a nontaxable item. Vaughn v. Commissioner, T.C. Memo. 1992-317, affd. without published opinion 15 F.3d 1095 (9th Cir. 1993).
The Court concludes that petitioner realized discharge of indebtedness income in the amount determined in the notice of deficiency.
Do you really want to be in trouble with the IRS? Most people wouldn't. But, that is exactly where you will find yourself if you listen to the false and misleading information provided by Creditwrench CEO Billie Bauer.
"one of my goals for this and the upcoming years is to inform the greatest number of consumers possible about the(tax)law and how to inform the IRS when creditors or collectors violate the law by failure to comply".
What that means is anyone foolish enough to follow the information provided by Creditwrench CEO Billie Bauer will shortly find themselves facing penalties, interest, bank levies, garnishment, and possible jail time, courtesy of CREDITWRENCH CEO Billie Bauer.
A case in point.
Today, in regards to a creditor issuing the required 1099-c on a discharged debt, CREDITWRENCH CEO Billie Bauer stated:
"if no 1099 is issued by the creditor then no tax is collectable by the IRS".
The truth is, and the Internal Revenue Code makes very clear, you are responsible to report all income from any source, including the discharge of indebtedness, to the IRS irrespective of whether you receive the necessary forms.
Here is how the United States Tax Court ruled on this exact issue just this past March.
Petitioner claims he did not receive a Form 1099-C from American Express discharging the debt. “The moment it becomes clear that a debt will never have to be paid, such debt must be viewed as having been discharged.” Cozzi v. Commissioner, 88 T.C. 435, 445 (1987). The nonreceipt of a Form 1099 does not convert a taxable item to a nontaxable item. Vaughn v. Commissioner, T.C. Memo. 1992-317, affd. without published opinion 15 F.3d 1095 (9th Cir. 1993).
The Court concludes that petitioner realized discharge of indebtedness income in the amount determined in the notice of deficiency.
Do you really want to be in trouble with the IRS? Most people wouldn't. But, that is exactly where you will find yourself if you listen to the false and misleading information provided by Creditwrench CEO Billie Bauer.
