I was recently contacted about a 2012 tax return.
It was prepared and filed by a local CPA within the last couple years.
During 2012 husband filed bankruptcy, and wife was pronounced disabled.
Wife's student loans were subsequently wiped due to the disability, and 1099C was/were issued. (First I have heard of this.)
Apparently they ignored the situation for a period of time before eventually filing once hounded by the feds.
They were trying to do a penalty abatement this summer and had not heard back from the IRS, so they called me to see if I could help. I believe the delay is all Covid related, but once I heard the details of the case I was kind of surprised they would not have qualified for an exclusion, presumably based on the insolvency.
The other CPA is on the older side, and took well over a month to get back to the client when I told them to ask about it.
He claims they would not qualify for any exclusion.
I am thinking about taking up the case and asked for all documents related to the bankruptcy, and student loan discharge of debt.
Perhaps there is something I am missing about this? I told them I'm not an expert in 1099C, but I could research it further.
Has anyone dealt with a 1099C for student debt? In my limited research so far I haven't found anything that disallows this type of debt for insolvency calculations.