1099-C

[ccjpol]

I received a 1099-C from PayPal Credit today.  After researching myself, I confirmed what I already knew, that I hadn't even USED my credit account in over two years, and the last time I accessed it at all was to pay it in full--again, over two years ago.  I am very upset about this because I work in finance, and anything like this that WAS actually reported to the IRS (whether incorrect or not) would be a real problem for me.  There is a phone number for questions, however, it goes to a voice mail.  I left only my name and phone number.  Further research shows that there are a large number of people who have received this, telling me that PayPal has had yet another data breach.  This is very upsetting, and I don't understand why PayPal doesn't have better data security, this has happened several times with PayPal accounts! 

[Addie444]

I have a feeling we'll be seeing a lot of this same issue over the next few weeks. I received the same 1099-C from Paypal in Luxembourg, saying I had $2,212.05 discharged (cancelled or forgiven) and it was delivered to my ex's address, where I haven't lived for five years. It's also addressed to my old name, which also hasn't been used in five years (I'm trans). I've never had a debt with PayPal Credit and even if I did, it was discharged in chapter 7 bankruptcy in 2016 (7 years ago). I work for the Internal Revenue Service (21 years now) and they hold employees to a higher standard when it comes to paying taxes accurately and on time, so now I have this hanging over my head as I debate whether or not I should claim this bogus debt on my tax return. I will see what I can find out from work about this nonsense, but just a heads up, it may be difficult getting any answers because we're all still trying to get caught up on millions of tax documents after being shut down during the height of the pandemic. I'm hoping if anyone else finds any answers they'll post here. I did find a thread about this same issue on Reddit from one year ago and there are a few new replies to the original post from the past few days saying they've received 1099-C's from Paypal in Luxembourg. Here's the link: https://www.reddit.com/r/paypal/comments/snaw10/informed_delivery_shows_tax_return_documents/ Hope to find some answers soon! Addie

[Grimlock2]

Thank you.  If you find out anything from your employer I'm sure we'd all be grateful to hear any words of wisdom.  In my research I came across this useful source that helps identify what we have to look forward to.

https://johngoldhamer.com/Workshops/Validating-Verifying-and-Disputing-IRS-Form-1099-Income.pdf

Hope it helps.

[Addie444]

Thank you for that link, it looks like it may be very helpful. I'll definitely keep everyone posted if I find any answers. 🙂

[Kiyahra]

Thank you for sharing that Addie! I hope this mess gets straightened out! EVERYONE: PayPal has a section on their site that allows you to look to see if they sent you any tax forms! I’m sorry I don’t have the link but i went to it and it verified that I have NO tax documents from them. This is definitely a scam! Check your own accounts as well, it’s a relief to see it and it verifies it’s a fake. I felt better after checking, but still very concerned. Who has my info? How did they get it? Do they have my full SSN? I hope this turns into a class action lawsuit. Pretty sure the data breach in December is how whomever got our info. Anyone here a lawyer?

[Addie444]

Hi Kiyahra, thank you so much for that tidbit! I just went to my PayPal account on the app and found the same link to check for "statements and taxes" and it also said there are no tax documents for me. I checked 2022 and 2021. Still though, I'm curious if that would only show 1099-K's. It was difficult finding any info about 1099-C's, bit I finally found a section with FAQ's for that very form. I copied the info and pasting it here: "What is a Form 1099-C? Form 1099-C is used to report information to the US Internal Revenue Service (IRS) when a debt has been cancelled, including as part of a discharge in bankruptcy. PayPal is required to issue Form 1099-C when a debt of $600 or more has been cancelled. This may apply to products such as PayPal Credit, PayPal Working Capital, and Business Loans. Forms 1099-C are mailed to customers around January 31 following the tax year in which the debt was cancelled. Who do I contact if I have questions about my Form 1099-C? If you have questions about your Form 1099-C or are unsure why you received this form, call the appropriate Customer Service team below. Please refer to Box 4 (Debt description) of your Form 1099-C which provides a description of the type of debt that was cancelled to determine the correct contact number. PayPal Credit:[Removed. Phone #s not permitted]– Please leave a voicemail containing the nature of your call, your account number (as listed on your Form 1099-C), and a return phone number for a callback." I hope this helps anyone. I'm going to give them a call on Monday because I've already spent several hours searching for answers today and I'm tired. 🥱

[Addie444]

Since the phone number was removed from what I copied and pasted, which was their own phone number, here's the link to what I pasted... https://www.paypal.com/us/cshelp/article/what-is-a-form-1099-c-help974

[MoniqueAnneMc]

Does this mean that we will have to still file the 1099c when we do taxes?

[Grimlock2]

As far as I can ascertain - if it's likely a fake 1099 then no, as acknowledging it may be taken as an admission that you are responsible for the debt.  If it is a valid 1099 then what I have read is that you likely have to file it with comments to the IRS requesting that it not be included as income as you only received it as a result of identity theft.  Be prepared to show proof of this in your submission.  I think this is unfair as it puts the onus on the filer to supply evidence and lets the supplier (PayPal) completely off the hook, but that seems to be the process with the IRS as far as I can see at the moment.  I'm thinking of consulting with a tax professional to see what to do as I had already submitted my return using Turbo Tax.   I think I may have to supply an amended return acknowledging the 1099 and  questioning its validity.

[ccjpol]

I actually contacted PayPal Credit, and was essentially brushed off by an extremely rude customer service person who obviously didn't care at all, was uninterested in helping at all, and made me feel like I was wasting HER precious valuable time.  I, too, think this is related to their latest security breach, and would be interested in a class action lawsuit.  This seems to be a running theme with PayPal, and there never seems to be any consequences for them, it is always their customers who have to scramble to "fix" the problem and protect themselves. 

[11715KB]

I'm interested in the class action. My story is long but I too received In error to an address of a relative. They cannot respond.