- 4 -
petitioner and to the Internal Revenue Service a Form 1099-C,
Cancellation of Debt, reporting discharge of indebtedness income
in the amount of $19,866.70. On April 21, 1999, petitioner sent
the Form 1099-C back to MBNA with a cover letter in which he
stated, among other things:
The debt was never a “forgiveness” of anything, but as
you know a compromise of many issues of a vague,
doubtful, and disputed claim. * * *
I stopped my payments to you after many accusations on
both sides, and after a period of time, I was offered a
complete settlement of the account for $17,500. After
considerable negotiations, a settlement was effected of
$12,750 [sic]. This was to save us both a law suit and
legal expense, as well as an equitable conclusion of
your improper handling of my account.
Petitioner attached to his 1998 tax return a statement as
follows:
No amounts pursuant to the attached 1099 have been
included in individual income. The cancellation should
be characterized as a compromise of a doubtful and
disputed claim. No deductions were taken for these
expenditures.
Respondent determined that petitioner received cancellation
of indebtedness income in 1998 in the amount of $19,866.70.
Respondent also determined that petitioner had unreported
interest income of $128 and adjusted petitioner’s taxable Social
Security income. Petitioner did not in his petition or at trial
dispute the interest or Social Security income adjustments. He
is thus deemed to have conceded them.
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011