Solid Ground Carmel Financial, Carmel Financial Filing Against Me With IRS Carmel Indiana

Well, this is about a letter I recieved in the early spring of 2007. It stated that I had a bill for $2400 and some change. This was a collection bill for Carmel Financial. I called, and this bill was allegedly for a camara I purchased in 1989!!! 18 years later I get a bill! I told them I new nothing abaout it, and the statute of limitations had run out for reporting, as I had never once seen this on any credit report, I did not pay much attention to it. in 2007 I recieved a charge off paper, this was reportred to the IRS as a 1099 Misc. I fought over the phone forever, and I was treated very bad, told if I paid my bills to start with, this would have never happened, even though this was never my bill. I can assure you I have never spent that much on a camera, much less anything at that time. I know this as I remember getting a camera for my birthday in 1990 from my father, and this was the first camera I had ever owned. Anyway, The IRS counted this as income, and now I owe almost $900.00 in back taxes. We wrote and faxed trying to get proof, anything about this debt somehow tying this to me. The company has charged this off and won't speak to me as this is not an issue for them anymore, and the IRS doesn't care. As this was never a bill I had ever known about, I have nothing other than the 2 pieces of mail from this company. I am debating on taking them to court, but can I? How do you make it worthwhile? Do I sue for extra damages, as I assume the court costs will exceed the IRS bill? Or do I suck it up and get screwed by a big corporation? This is something I could not even fathom happening, I was tried, convicted, and fined without as much as a say-so in the matter, and to make it worse, nobody is claiming ownership to this mess, and there is nowhere to turn. Would love to hear input on this, thanks.

Solid ground
Mackville, Kentucky
U.S.A.