Legal Question in Credit and Debt Law in Kentucky

Midland funding LLC has reported to the IRS that a debt of $6895.00 was forgiven in 2008 and now I owe taxes on this unknown account. Please advise what recourse I have. Thank you.


Asked on 5/03/10, 6:31 pm

1 Answer from Attorneys
Mary Cartwright Smith & Cartwright, LLC

If at the time the debt was canceled, you met the IRS definition of insolvency (your debts were greater than your assets) you can fix this problem by filing a particular tax form. This is explained in detail at http://www.irs.gov/pub/irs-pdf/p4681.pdf. I suggest you call your local legal aid office (584-1254), because it has a tax clinic that can help you file the form for free. If they won't do it, you can go to a private attorney. Tax prep places like H&R Block etc. usually won't help with this problem or they will charge you more to do the form than a private lawyer would.

Mary Cartwright (502-618-2486)

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Answered on 5/09/10, 8:48 am


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