My friend here declared bankruptcy in '04.included was a Bank One credit card.in December '07 he starts getting notices from the IRS that additional income was reported to them that was not declared in '05. My friend, his accountant, and myself start to tackle this problem that came out of the blue, regarding something from three years ago. We deny the income. We hear nothing from the IRS. Time to file taxes in early February. I call the IRS offset hotline to see if they will be taking any of his 3,000 refund. No offset, the hotline informs me. Two days after filing we find out they are taking all but 300 of the refund to pay his taxes on the '05 return.
I start getting VERY aggressive in trying to get to the bottom of this. The IRS needs his bankruptcy papers to show he listed the debt, had it covered and was insolvent at the time, instead of the debt just being "cancelled."
Why would they simply cancel this debt? Why not sue? Of course it was covered by bankruptcy. They would not just cancel this debt when they could sue.
I google ol' J P Morgan Chase. I find out they are notorious for trying to screw people that declared bankruptcy on them by sending 1099s to the IRS, but never the customer. Why shouldn't they send the customer a 1099 so they can do the responsible thing? My 401 (k) and pension sure send me 1099s. My banks send me 1099s. Because they are being deceptive and hoping you will forget, that is why these spiteful credit card issuers do not send the 1099. I also find that Morgan bought Chase in '99, and then bought Bank One in '04. So, my friend is absolutely right. He never had a Chase card. Chase took his Bank One card and branded it as a Chase. That's their key: Wait until the customer's memory is already hazy, and then slap it all into a new package so you sure as hell can't figure it out enough to defend yourself. And this is all seemingly done out of spite. What does Chase get out of my friend losing money to the IRS? But of course, they were recently in bed with the Federal Government in taking home Bear Stearns.
We file an admendment. We send in the Bankruptcy papers. Of course, the IRS is taking 30-60 days to figure it out (I doubt they will, since Bank One is now being packaged as Chase, and is not listed as reported by Chase). Then, I get my friend's credit report. Out of the big three, two list the account in question as finished with bankruptcy. The third says the debt was transferred to another agency. I call the number for Chase as listed. I hem and haw around, since I don't want to tell them too much. They may not help me out, if they think they are helping me out. I tell them about the discrepancy and that I'm just trying to figure out where this debt wound up. They told me they sold it to "Weinstein" aka "B-Line". That means they sold an absolutely uncollectable debt to that agency and got money for that, even if it was for pennies on the dollar. I ask if this was a Bank One card. She confirms that it was a Bank One card. The operator then said, "but this is listed in the bankruptcy. When did you file?" I said, yeah, that's how it should be. She then said they would change the report for the third credit bureau, and mail be a letter stating that it was finished in bankruptcy. I'm still waiting for the letter. If it doesn't come by the end of next week, they'll be way past their stated time frame for when I should have received it.
If you have bankruptcies involving Chase, J P Morgan, or Bank One, be careful if you receive something from the IRS about them. You'll be facing a huge amount of deception and legwork to get what's rightfully yours. This company is spiteful as hell.
And as an added bonus, I loved the IRS's statement: "We want to help you fulfill your responsibilities..."
But they sure as hell didn't care about being responsible themselves or asking companies issuing 1099s to be responsible...
I'll enjoy hearing about your experiences with such situations... I know you've had them.
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