Almost a year ago I was writing a report about how Asset Acceptance violated the FDCPA by continuing to try to collect a debt that I disputed and sent a VOD letter for by certified mail. I wrote about how I ended up filing a BBB and FTC complaint against them. The BBB complaint ended up with them writing a letter to the BBB and in that they stated: "However, in an effort to resolve and even though AALLC believes this is a valid account we will close the account in question and cease all collection activity." Which is really nothing more than their way of saying they can't validate the debt. This should have been the happy ending of this story and I thought it was until yesterday.
2/9/10 I receive in the mail a 1099-c Cancellation of Debt from Asset Acceptance.
Why is this bogus?:
1. I disputed the debt and you can't file a 1099-c on disputed debt until you validate and prove it
2. They never validated the debt
3. They did not cancel the debt (as they did not validate it and therefor not forgive it) but rather as in their own letter "closed the account" and ceased collection activities.
Again they did not cancel a valid debt (and they checked off the little box on the 1099-c stating that I am liable for the debt--yet failed to prove that) but rather failed to validate the debt in accordance with the FDCPA. There is a huge difference between the two.
Where does this leave me? Unless I get Asset to void the 1099-c by April 14th (as I will have to file by the 15th) I will have to claim it as income! First of all it was never income. I never recognized the debt as mine and they never bothered to prove it was mine instead they violated the FDCPA and tried to bully me into paying rather than following the law. If I have to claim the income it changes my whole tax scenario and not fair.
What I have done so far: filed a complaint with my state AG, filed a complaint with their state AG, filed another complaint with the BBB (referencing the first one), filed another complaint with the FTC also referencing the first one and filed a complaint with the USPS for mail fraud. Why mail fraud, if you send a fake tax form or fraudulant claim via the postal service you are committing mail fraud.
What I will do soon: I give them until 3/31/10 to void this 1099-c if they fail to do so since I believe they are committing tax fraud and failure to report a crime is a crime, I will just have to fill out a 3949-a and send it to the IRS (report them for tax fraud) with all my supporting documentation and being as anal as I am I saved it all! Let them prove to the IRS it is valid and let them prove to the IRS that I was liable (they couldn't prove it to me).
It has been my long held belief that such bottom feeders, scam artists etc... rely on the following things in their victims:
1. being gullable
2. remaining ignorant (to be ignorant means to not know something and therefor we are all that, remaining ignorant is failing to educate yourself)
The letters IRS together strikes fear in many American hearts and so I think they rely on our fear of the IRS that we won't do anything against a fake 1099-c.
Well fine they want to bring the IRS into this, I'm happy to volley. In their case they will be investigated and they will have to prove to Uncle it is a valid 1099-c on a validated debt that they can prove my liability for. Good luck with that Asset.
Me, if I don't have the voided 1099-c by the time I need to file I will claim it, still seek the voided 1099-c as I can always refile later after I get that. I don't think Uncle will like to have to pay back taxes people had to pay from phony 1099-c and maybe that will make Uncle start looking at the JDBs and the 1099-c they file!