Midland Credit Mgmt ripoff It just appeared on my credit report and I just received a letter from the IRS stating I owe $800.00 since this bogus account was terminated for default San Diego California

Midland credit mgmt. is a JDB collections agency, a 1099c must come the the original creditor.

Its my understanding that the original creditor has until Jan. 31 of the tax year, to file this form, just as an employer has to Jan. 31 to mail your w-4 to you. not any years later

If the original creditor charged this off years ago, then this account was sold. for pennies on the dollar.

You are only required to pay on what the original creditor lost at the time they filed the 1099c, not a collection agecny, filing several years later, adding interest.

When you contact the IRS, find out if Midlant Credit is collecting for them, You can set up a payment plan with the IRS, after you get to the bottom of this, you generally pay a certain dollar amount by the zip code you live in.

When you contact Midland do it in writting only(RRR) have them send you a copy of the 1099c, and all other information to validate this claim and who the original creditor was.

If the original creditor charged off and sold this debt to any JDB. Then the JDB can not file a 1099c as if there the original creditor.

I listen to the Dave Ramsey show almost daily on XM radio and this is a topic that I heard from numerous other callers to his show. The IRS is right to send you a bill stating you owe taxes of what you claim of $800. Its called debt forgiveness and in the eyes of the IRS that is taxable income. As a listener to the show I am just relaying what I have heard. The creditor should have sent you a 1099 at the end of the year showing that this was a debt forgiveness and they (the creditor is legally required to inform the IRS) of this fact.

I am sorry but I have heard this way to many times from callers asking him why they received a 1099. I would contact the creditor immediately and get that 1099 from them and seek a accountant right away. You do not say what tax year that the IRS is stating that you owe this money on but if its under 3 or 4 years I would suggest having your tax prep person do an admended tax return for that year and see what payment plan you can work out with the IRS. Remember late fees are accruing and interest is also growing on this debt so no matter what...I would strongly pay the debt and then work on resolving this IRS claim afterwards.

FYI: remember the IRS has unlimited power to seize and garnish anything they want so I would not play around with this issue. Seek tax attorney IMMEDIATELY.