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This editorial was written specifically to address the overwhelming number of
1099-Cs generated by Portfolio Recovery Associates. The practice of issuing
1099s to consumers on old, out of statute, bogus, un-validated debts that may
not even belong to the consumer is spreading rapidly throughout the industry.
The insight below should be of interest to anyone having received a bogus
1099-C from any agency in the US. Because of the complexity of the tax system, ALWAYS consult with a tax professional, a CPA, or your attorney.
Portfolio Recovery Associates, Inc. & IRS Form 1099-C
Portfolio Recovery Associates, (PRA) of Virginia Beach, VA is sending out thousands of 1099-Cs for debts charged off in the 1990s to very confused consumers.
The majority of recipients apparently have never done business with PRA, which further adds to the confusion. Many advocates believe this is an illegal practice used to inflate profits.
The methods offered in dealing with 1099-Cs are wide ranging so we are sharing some here with the hope that you may find the right one appropriate for your situation.. The information below was compiled from a variety of sources, including consumer law professionals and CPAs.
Some readings of the rules and regulations regarding 1099-Cs appear to have determined that only principle on a charged off debt can be reported on the form. That is to say, interest, admin charges, fees of any other type that expand the debt are not to be included.
Because of the complexity of the tax system, ALWAYS consult with a tax professional, a CPA, or your attorney.
So the question becomes, if the 1099-C that was issued to you from PRA, has exceeded the amount of the original principle, would the 1099-C be legitimate? There is also the legal question of how a junk debt buyer can ‘cash in’ on a debt that has already expired under state statutes. If a debt is legally un-collectible, how can PRA state they took a loss on a time barred debt, where no goods or services were given? This is further complicated by PRA’s apparent inability to provide valid documents that show they own the debt or even has any type of valid agreement with the consumers they allege caused them the loss. This appears to be yet another fleecing of the American consumer which begs for federal interpretation and intervention.
Debts in the hands of third party agencies do tend to grow rapidly beyond the original amount. To be sure in your situation, always consult with consult with a tax professional, CPA, or your attorney. They are best suited to offer you legal advice and information on how to deal with the PRA 1099 fiasco.
Here is information you may find helpful in dealing with PRA.
Check out the IRS site at www.irs.gov Read about IRS form 982 to see if it applies to you and your situation.
Disputing the Debt - Yet Again
If you previously sent PRA a dispute validation notice when they mailed you an initial written notice and PRA failed to respond, you may want to consider the following.
Send the IRS a letter; include a copy of the initial letter from PRA and a copy of your FDCPA dispute notice. If accurate, state that PRA did not respond to your notice, did not offer any valid documents that connect you to the alleged claim. Include copies of PRA letters.
Affidavit of Fact?
One attorney suggested you send the IRS an Affidavit, signed and notarized that includes statements that may apply to your situation, such as:
a) I have never had an account with PRA.
b) PRA and I have never entered into any type of written agreement.
c) PRA has never presented me with any goods or services.
d) The account referenced by PRA is long past my State statutes.
e) I have never done business with PRA.
Postal Inquiry
Another suggestion we found particularly interesting is filing a ‘Mail Fraud Complaint’ with the U.S. Postal Inspectors based on the fact that the (bogus?) 1099’s were mailed to you. Mail Fraud Complaint
For Identification: Portfolio Recovery Associates, Inc. (Collection Agency)
120 Corporate Blvd., #100
Norfolk, VA 23502
www.portfoliorecovery.com
1099-Cs generated by Portfolio Recovery Associates. The practice of issuing
1099s to consumers on old, out of statute, bogus, un-validated debts that may
not even belong to the consumer is spreading rapidly throughout the industry.
The insight below should be of interest to anyone having received a bogus
1099-C from any agency in the US. Because of the complexity of the tax system, ALWAYS consult with a tax professional, a CPA, or your attorney.
Portfolio Recovery Associates, Inc. & IRS Form 1099-C
Portfolio Recovery Associates, (PRA) of Virginia Beach, VA is sending out thousands of 1099-Cs for debts charged off in the 1990s to very confused consumers.
The majority of recipients apparently have never done business with PRA, which further adds to the confusion. Many advocates believe this is an illegal practice used to inflate profits.
The methods offered in dealing with 1099-Cs are wide ranging so we are sharing some here with the hope that you may find the right one appropriate for your situation.. The information below was compiled from a variety of sources, including consumer law professionals and CPAs.
Some readings of the rules and regulations regarding 1099-Cs appear to have determined that only principle on a charged off debt can be reported on the form. That is to say, interest, admin charges, fees of any other type that expand the debt are not to be included.
Because of the complexity of the tax system, ALWAYS consult with a tax professional, a CPA, or your attorney.
So the question becomes, if the 1099-C that was issued to you from PRA, has exceeded the amount of the original principle, would the 1099-C be legitimate? There is also the legal question of how a junk debt buyer can ‘cash in’ on a debt that has already expired under state statutes. If a debt is legally un-collectible, how can PRA state they took a loss on a time barred debt, where no goods or services were given? This is further complicated by PRA’s apparent inability to provide valid documents that show they own the debt or even has any type of valid agreement with the consumers they allege caused them the loss. This appears to be yet another fleecing of the American consumer which begs for federal interpretation and intervention.
Debts in the hands of third party agencies do tend to grow rapidly beyond the original amount. To be sure in your situation, always consult with consult with a tax professional, CPA, or your attorney. They are best suited to offer you legal advice and information on how to deal with the PRA 1099 fiasco.
Here is information you may find helpful in dealing with PRA.
Check out the IRS site at www.irs.gov Read about IRS form 982 to see if it applies to you and your situation.
Disputing the Debt - Yet Again
If you previously sent PRA a dispute validation notice when they mailed you an initial written notice and PRA failed to respond, you may want to consider the following.
Send the IRS a letter; include a copy of the initial letter from PRA and a copy of your FDCPA dispute notice. If accurate, state that PRA did not respond to your notice, did not offer any valid documents that connect you to the alleged claim. Include copies of PRA letters.
Affidavit of Fact?
One attorney suggested you send the IRS an Affidavit, signed and notarized that includes statements that may apply to your situation, such as:
a) I have never had an account with PRA.
b) PRA and I have never entered into any type of written agreement.
c) PRA has never presented me with any goods or services.
d) The account referenced by PRA is long past my State statutes.
e) I have never done business with PRA.
Postal Inquiry
Another suggestion we found particularly interesting is filing a ‘Mail Fraud Complaint’ with the U.S. Postal Inspectors based on the fact that the (bogus?) 1099’s were mailed to you. Mail Fraud Complaint
For Identification: Portfolio Recovery Associates, Inc. (Collection Agency)
120 Corporate Blvd., #100
Norfolk, VA 23502
www.portfoliorecovery.com