The IRS is seeking public comment regarding guidance for entities that discharge indebtedness and may be required to furnish 1099-C returns.
Section 6050P(b) of the Tax Code says that an applicable entity must issue an information return if $600 or more of indebtedness is discharged. Treasury regulation §1.6050P-1(b)(2) also lists eight identifiable events that trigger a reporting obligation, including the expiration of a non-payment testing period that results when a creditor does not receive payment or engage in bona fide collection activity for specified periods of time.
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