I sold my home in a short sale in which was approved by Litton. My real estate agent said that Litton told him just to get the property sold as soon as possible. Yesterday I received a CP2000 Notice dated April 16 from the IRS adjusting my income for 2005 due to this 1099C filing by Litton. It increased my taxable income from $37,049 to $113,811, for a difference of the amount on the 1099C of $76,762.
Now the IRS says I owe them $25,142. I never recieved a copy of the 1099C although Litton says they sent it out on January 31. They made no effort to change the address on the notice even though they knew the property sold the previous July, and I was not then living in the home, the new owner was. I am in the process of gathering information from my realtor and closer regarding financial figures, etc.
Litton approved this short sale and should not have filed the 1099C for such an atrocious amount. This would have made my mortgage over $359,000. They agreed to a payoff of $263,000, which was the final figure, of which I received nothing. All funds went directly to Litton. The fair market value of the house was, approximately, $283,000 or -. What cloud they picked up their "Cancellation of Debt" amount came from I don't know.
I am now almost 64 and living on unemployment compensation as I have not worked since last September. I have had a hard time securing employment because of my age and health. This is a large company picking on someone who has no resources. I rent an apartment with my 86 year old mother who is on Social Security. These bums need to be taken to task and I hope what my research does helps to do that.
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