by Michael Lodge
IRS issues new ruling to remove the 36-month nonpayment testing period rule. If you have questions on personal or business taxes, call 877.778.1770.
The Internal Revenue Service has removed a rule requiring that a discharge of indebtedness for which a Form 1099–C, ‘‘Cancellation of Debt,’’ must be filed occurs when a 36-month non-payment testing period expires.
The IRS released final regulations Thursday removing the three-year period for filing the form.
The IRS and the Treasury Department are concerned the rule leads to taxpayer confusion and doesn’t increase tax compliance by debtors or provide the IRS with third-party information that could be used for taxpayer compliance.
The final regulations, which took effect Thursday, mainly affect financial institutions and government entities. by Michael Cohn, Tax Pro Today