USA 1099 on 30 year old credit card debt


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I just got a 1099 on a credit card that was last paid on in 1985. I made no other promises or payments thereafter. I told the collection agency to stop bothering me 20 years afterwards. Now in 2015 I got a 1099 from Citibank on the debt.for 2014. I made money in 2014 and I tried to move it to 2015 but couldn't. But issuing a 1099 on a write off that is 30 years old seems outrageous. What if the debt was from 1940? There must be a time when the right of the credit card (or other creditor) would end.
Incidentally in 1985 through 2005 I made very little or no money and had no assets. I could have claimed insolvency at that time.
 
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So what is your question?
Citibank will not delete the 1099-C so I plan to show it on my tax return along with a separate letter of explanation deducting it and not count it as income on my return. Or should I use taxpayer advocate instead? Or what would be your suggestion? I am relying on the 36 month "test period" where Citibank would have to had charged it off and issue the 1099 many moons ago.
 

Samir

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If the amount is not too large, I would use any IRS regulations that help you. Otherwise, I would go the route of taxpayer advocate.
 
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If the amount is not too large, I would use any IRS regulations that help you. Otherwise, I would go the route of taxpayer advocate.
I am using tax court decision in the stewart case along with info I picked up on Internet. Amount is $4300. Does tax payer advocate require I have no or very little assets?
 

Samir

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Taxpayer advocate only requires that you will have a financial loss because of a tax issue that is not being resolved.
 
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Taxpayer advocate will not get involved until after return is filed. Report the income on line 21 with an offsetting entry with explanation of why it is not taxable in 2014, statute of limitations probably expired 25+ years ago so there was no cancellation of debt income. This way will let the IRS computer match the 1099-C amount to your return and may result in letter from IRS requesting additional information but that is unlikely.

Kerry Claxton, CPA
 

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