My client:
1. Filed no taxes for 12 years
2. Earned nothing during that time (he was caring for/living with a sick relative)
3. Received a 1099-C (Cancellation of Debt) for $35K in 2015
4. Was pretty much completely insolvent (had almost no assets) during this time
5. Had net operating losses on his consulting business for all 12 years.
I don't have a great deal of experience with NOLs, but I believe it's possible I might be able to carryforward enough NOL from 2008-2014 to cover the $35K in 2015. But then I'd have to prepare 6 years of returns for him, and that would be costly. It would be far easier just to file 2015 with a form 582, declaring my client's insolvency. My client is concerned, though, that a form 582 might somehow impact his credit score/might show up on his credit report.
Does anyone here know the credit score ramifications of filing a 582?