Notice 2012-65 - Comments requested on information reporting for discharges of indebtedness  

December 21: Under the section 6050P regulations, there are eight events that trigger an obligation to report a discharge of indebtedness on Form 1099-C.

One of the eight events is the expiration of a non-payment testing period that results when a creditor does not receive payment or engage in bona fide collection activity for specified periods of time.


Notice 2012-65 (which appears in an advance release of IRB 2012-52 [PDF 892 KB] dated December 27, 2012) explains that comments are being requested because taxpayers who receive From 1099-C reporting a discharge of indebtedness of $600 or more because of the expiration of a non-payment testing period (under Reg. section 1.6050P-1(b)(2)(i)(H)) may be confused as to whether the amount reported on Form 1099-C constitutes income. Confusion may occur because the expiration of a non-payment testing period does not necessarily result from an actual discharge of indebtedness.


Notice 2012-65 requests comments concerning:


  • Whether Reg. section 1.6050P-1(b)(2)(i) needs to be amended to remove the non-payment testing period as an identifiable event?
  • Whether the removal of the non-payment testing period would increase or decrease the burden on creditors and taxpayers?
  • If the non-payment testing period is removed, whether additional rules are necessary to address continuing collection activity?
  • If the non-payment testing period is retained, how could it be modified to improve its usefulness and alleviate confusion?



©2012 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.


The KPMG logo and name are trademarks of KPMG International.


KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.


The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.


Direct comments, including requests for subscriptions, to us-kpmgwnt@kpmg.com.
For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at:

+ 1 202 533 4366

1801 K Street NW
Washington, DC 20006.

Subscribe

Current and future KPMG clients may subscribe to TaxNewsFlash email alerts.


Email your contact information.

Other TaxNewsFlash publications

TaxNewsFlash-United States by year