- 3 - do, you must pay us for all charges made by those persons, including charges for which you may not have intended to be responsible.” As petitioner received billing statements detailing charges to the account, he forwarded them to Ms. Feathers for payment. Ultimately, Ms. Feathers incurred $4,574.93 in charges on the credit card. Petitioner was subsequently contacted by a collection agency on behalf of Citibank. He was informed of the $4,574.93 delinquent balance and was offered the opportunity to settle the debt. In July 1999 petitioner settled the outstanding debt for $3,202.45, or 70 percent of the total value. Citibank reported $1,372 as cancellation of indebtedness income to respondent on Form 1099-C, Cancellation of Debt. Petitioners did not report this income on their joint income tax return. Petitioner denied receiving a Form 1099-C reporting the amount of debt discharged. Petitioner disputes having income from the discharge of $1,372 of the debt and, raising a variety of arguments, contends that a discharge of indebtedness does not constitute gross income. Discussion Respondent's determinations in the notice of deficiency are presumed correct, and, generally, petitioners must prove those determinations wrong in order to prevail. Rule 142(a)(1); WelchPage: Previous 1 2 3 4 5 6 7 Next
Last modified: May 25, 2011