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Tax Mar 2013 - "Canceled Debt Does Not Excuse Taxpayers from IRS Liabilities"

Tax Mar 2013 - "Canceled Debt Does Not Excuse Taxpayers from IRS Liabilities"

Tax Mar 2013 - "Canceled Debt Does Not Excuse Taxpayers from IRS Liabilities"

Excerpt


Canceled Debt Does Not Excuse Taxpayers from IRS Liabilities



Cancellation of debt might let you off the hook as far as your creditor goes, but your responsibility to the IRS could very well remain. When a taxpayer owes a debt and the creditor releases the taxpayer from the obligation to pay it, the IRS considers the amount forgiven to be income for the taxpayer that is subject to tax. 


 


 



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