Academic journal article ABA Banking Journal

ABA Presses Case against Debt-Reporting Details

Academic journal article ABA Banking Journal

ABA Presses Case against Debt-Reporting Details

Article excerpt

The Internal Revenue Service's proposed regulations governing new bank information reporting requirements for forgiven debt of more than $600 on Form 1099-C go too far, according to ABA.

"We are seriously concerned that the scope and tenor of the regulations have gone beyond the mere reporting of information currently on hand, and altered present law determinations as to when debt is forgiven," ABA wrote in a comment letter, The letter was followed up by testimony ABA presented at an IRS hearing at the end of March.

ABA also made many specific points, including:

1. The proposal should be revised to exclude any reference to a statute of limitations as a determining factor as to when debt has been forgiven.

2. Fees, penalties, fines, and administrative costs should not be considered reportable amounts. "The regulation should require banks to report only the amount of the unpaid principal on the loan and any accrued interest up to the date of discharge," ABA wrote. …

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