Bankruptcy Dismiss the Debt? Or IRS Issue?
December 20th, 2011 § Leave a Comment
Repost from ConsumerNews.com
Valerie, of Newton, Tex., contacted Consumer Affairs about a fairly serious tax problem. Her trucking business filed bankruptcy in 2001 and included two credit cards with Cross Country Bank in the filing. Since that time she was contacted by the IRS showing that credit card debt dismissed in 2010. According to IRS she did not pay taxes on the cancelled debt. (See Debt Forgiven but not forgotten by IRS.)
“I have received a letter from the IRS saying that I did not report a cancellation of debt on my last year income tax (2010) from a company I had no knowledge of,” Valerie said. “The company is ECAST Settlement Corp. This was a debt that was suppose to be taken care of in the bankruptcy.”
Valerie should not respond to the IRS until speaking with an accountant or tax attorney. If she is correct that the credit cards were covered in the bankruptcy, the collection agency that bought the debt might not be aware of that. She should get solid professional advice before proceeding.
