World Savings Bank Wachovia Filed 1099C on mortgage balance after selling the home- same year for $13,840 more than balance San Antonio, Texas

IRS advises a 1099C was issued for my mortgage balance in 2006. I never received a notice until hearing from IRS last October.
I gave up my home to the mortgage company as I have cancer and could no longer make payments. I was paid $500.00 by World Savings to help me with moving expense. (THANKS).

I foreclosed Novemeber 2006 and the property sold December 2006 for $13,840.00 more than the mortgage balance. Still, a 1099C  was issued for the entire loan balance. IRS intends to collect on this unpaid debt as income to me. It is public record of the sale of the property, however  IRS states it is up to the lender to correct. WACHOVIA gave me a fax number and I faxed everything to them last November 2010. WACHOVIA states there is no phone number but customer service does exist in San Antonio. I have not had a response. I am still disabled and cannot pay this debt but IRS can and will garnish my disability check. I don't owe this as the propety was sold at a profit. I left the home in move-in condition and an agent did a walk through before accepting the keys and handing me the $500 check. In January 2007, congress passed a law forgiving up to $250,000. of foreclosed mortgage debt for a single person, but my foreclosure was 2 months prior. Unless the 1099C is corrected- IRS says I owe the debt.