Henry B. and Angela E. Davis Martins - Page 4

                                        - 3 -                                         

          that point, it appears that American Express felt that further              
          collection actions would no longer be pursued, and a payment                
          agreement was worked out with petitioner through the efforts of a           
          collection agency employed by American Express.  Petitioner paid            
          $15,000, and American Express relieved and released petitioner of           
          the balance due of $6,831.38.  For the year 2002, American                  
          Express issued Form 1099-C, Cancellation of Debt, for the                   
          $6,831.38.  Petitioners did not include the $6,831.38 as gross              
          income on their 2002 Federal income tax return.  In the notice of           
          deficiency, the sole determination is that the $6,831.38                    
          constitutes gross income.                                                   
               From the record, it appears that the settlement between                
          petitioner and American Express came about by referral of the               
          account by American Express to a collection agency.  Through the            
          efforts of the collection agency’s contacts with petitioner, the            
          settlement agreement was reached.  After the $15,000 payment,               
          petitioner was of the impression, as he testified, that                     
          “everything was over”, and contends he never received the Form              
          1099-C issued by American Express.                                          
               At trial, petitioner argued that the $21,831.38 was not the            
          correct amount of his indebtedness because it included erroneous            
          delinquency charges of $2,646.19; additionally, he had accrued              
          membership rewards points on his credit card, and that together,            
          the erroneous delinquency charges and the value of the membership           





Page:  Previous  1  2  3  4  5  6  7  Next

Last modified: May 25, 2011