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penalties will be imposed for failure to report these

1099-C is required for each debtor for whom you canceled

amounts in nonlending transactions.

a debt of $600 or more.

4. Foreign debtors. Until further guidance is issued, no

For debts incurred before 1995 and for debts of less

penalty will apply if a financial institution does not file Form

than $10,000 incurred after 1994, you must file Form

1099-C for a debt canceled by its foreign branch or

1099-C only for the primary (or first-named) debtor.

foreign office for a foreign debtor, provided all the

If you know or have reason to know that the multiple

following apply.

debtors were husband and wife who were living at the

a. The financial institution is engaged in the active

same address when the debt was incurred, and you have

conduct of a banking or similar business outside the

no information that these circumstances have changed,

United States.

you may file only one Form 1099-C.

b. The branch or office is a permanent place of

business that is regularly maintained, occupied, and used

Recordkeeping

to carry on a banking or similar financial business.

If you are required to file Form 1099-C, you must retain a

c. The business is conducted by at least one

copy of that form or be able to reconstruct the data for at

employee of the branch or office who is regularly in

least 4 years from the due date of the return.

attendance at the place of business during normal

Requesting TINs

working hours.

You must make a reasonable effort to obtain the correct

d. The indebtedness is extended outside the United

name and TIN of the person whose debt was canceled.

States by the branch or office in connection with that trade

You may obtain the TIN when the debt is incurred. If you

or business.

do not obtain the TIN before the debt is canceled, you

e. The financial institution does not know or have

must request the debtor's TIN. Your request must clearly

reason to know that the debtor is a U.S. person.

notify the debtor that the IRS requires the debtor to furnish

5. Related parties. Generally, a creditor is not required

its TIN and that failure to furnish such TIN subjects the

to file Form 1099-C for the deemed cancellation of a debt

debtor to a $50 penalty imposed by the IRS. You may use

that occurs when the creditor acquires the debt of a

Form W-9, Request for Taxpayer Identification Number

related debtor, becomes related to the debtor, or transfers

and Certification, to request the TIN. However, a debtor is

the debt to another creditor related to the debtor.

not required to certify his or her TIN under penalties of

However, if the transfer to a related party by the creditor

perjury.

was for the purpose of avoiding the Form 1099-C

requirements, Form 1099-C is required. See section

Statements to Debtors

108(e)(4).

If you are required to file Form 1099-C, you must provide a

6. Release of a debtor. You are not required to file

statement to the debtor. Furnish a copy of Form 1099-C or

Form 1099-C if you release one of the debtors on a debt

an acceptable substitute statement to each debtor. In the

as long as the remaining debtors are liable for the full

2018 General Instructions for Certain Information Returns,

unpaid amount.

see:

Part M for more information about the requirement to

7. Guarantor or surety. You are not required to file

furnish a statement to the debtor, and

Form 1099-C for a guarantor or surety. A guarantor is not

Part J for specific procedures to complete Form 1099-C

a debtor for purposes of filing Form 1099-C even if

for debtors in bankruptcy.

demand for payment is made to the guarantor.

8. Seller financing. Organizations whose principal

Truncating debtor's TIN on payee statements.

trade or business is the sale of non-financial goods or

Pursuant to Treasury Regulations section 301.6109-4, all

non-financial services, and who extend credit to

filers of Form 1099-C may truncate a debtor's TIN (social

customers in connection with the purchase of those

security number (SSN), individual taxpayer identification

non-financial goods and non-financial services, are not

number (ITIN), adoption taxpayer identification number

considered to have a significant trade or business of

(ATIN), or employer identification number (EIN)) on payee

lending money, with respect to the credit extended in

statements. Truncation is not allowed on any documents

connection with the purchase of those goods or services,

the filer files with the IRS. A creditor's TIN may not be

for reporting discharge of indebtedness on Form 1099-C.

truncated on any form. See part J in the 2018 General

See Regulations section 1.6050P-2(c). But the reporting

Instructions for Certain Information Returns.

applies if a separate financing subsidiary of the retailer

Account Number

extends the credit to the retailer's customers.

The account number is required if you have multiple

Multiple Debtors

accounts for a debtor for whom you are filing more than

For debts of $10,000 or more incurred after 1994 that

one Form 1099-C. Additionally, the IRS encourages you

involve debtors who are jointly and severally liable for the

to designate an account number for all Forms 1099-C that

debt, you must report the entire amount of the canceled

you file. See part L in the 2018 General Instructions for

debt on each debtor's Form 1099-C. Multiple debtors are

Certain Information Returns.

jointly and severally liable for a debt if there is no clear and

Box 1. Date of Identifiable Event

convincing evidence to the contrary. If it can be shown

that joint and several liability does not exist, a Form

Enter the date of the identifiable event. See When Is a

Debt Canceled, earlier. However, if you actually cancel a

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Instructions for Forms 1099-A and 1099-C (2018)

Instructions For Forms 1099-A And 1099-C - Acquisition Or Abandonment Of Secured Property And Cancellation Of Debt - 2018 Page 5

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