The American Institute of CPAs has written to the Internal Revenue Service agreeing with the IRS’s proposed guidance governing how to report the cancellation of debt, but suggesting some changes as well.
“We support the Internal Revenue Service’s efforts to address issues surrounding Form 1099-C, Cancellation of Debt,” AICPA Tax Executive Committee chair Jeffrey A. Porter wrote in a letter to the IRS on Monday. “We strongly believe changes are needed to the filing requirements for Form 1099-C. Specifically, we suggest that IRS require lenders to issue Form 1099-C only upon the legal discharge of a debt, which will occur at the earlier of the expiration of the applicable statute of limitations or when all collection efforts by the lender or surrogate collection organizations have ceased.”
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