What if I told you that when the bank cancels your debt, they don't tell you, they just tell the IRS? Now, in this video, I'm going to expose how banks secretly use IRS forms like 1099 C, 1099A, and 1096 to discharge your debt behind the scenes and how you can use those same forms to uncover the truth and protect yourself. Now, I've studied tax law, consumer credit, and administrative remedy, and I'm here to help you understand what's really happening when a creditor claims a loss and how that affects your right to challenge the debt. Now, before we dive into this video, thank you guys for watching this video. Okay, last video had a lot of success talking about promisary notes. If you want to learn more about that, go ahead and tap into the videos and watch the video from yesterday. We're going to keep that energy going and we're going to talk about 1099s. Okay, I feel like we get a lot of questions about 1099s. So, I wanted to make another video talking about the aspect of 1099s, what truly happens, and how to be able to use it to your advantage. Okay. I want to also clear up some things as it pertains to 1099s so that you don't fall into a situation to where you are negatively affected as it pertains to 1099s. All right. Now, before we dive into this video, make sure to like the video, okay? Make sure to hit the subscribe button, okay? When you do this, this actually boosts the algorithm and allows people to see content like this, the primary content that nobody is talking about. All right, so what we're going to be talking about today is essentially what these IRS forms are. We're going to talk about how the creditors use the forms to their advantage and we're going to talk about why you haven't seen these forms and more importantly how to use these forms for debt remedy. Okay. So, if I were you, I would have a notebook and a notepad. I would take down some notes. More importantly, I would stay all the way to the end because we're going to be unlocking some keys to this debt discharge system and talking about some things that that hopefully will be able to help you on your journey. All right. So, let's dive straight in. Okay. First thing I want to talk about is the aspect of what a 1099 C is. All right. A 1099 C is the cancellation of debt is an IRS tax form used to report debt that has been cancelled or forgiven by a creditor. Okay. It also says the purpose reporting cancelled debt form 1099 C notifies both the IRS and the debt door that the debt of $600 or more is no longer owed. Okay, so it is used when a creditor typically writes off 600 or more in debt typically after it quote unquote defaults after 120 days after 180 days. And the IRS treats this as taxable income for you. Okay. It also serves as proof that the lender was paid or it charged it off. So when you look at your when you look at your your credit reports and you see charged off, it essentially just is proving that they filed the 1099 and number one they canled or forgiven the debts and also at the same time it's they was paid. Okay, they was paid by the IRS using these 1099 forms. Okay, so we're going to talk about the aspect of how to use this to your advantage, but right now I'm just talking about the what what a 1099 form is. So then I want to talk about the 1099A. Okay. A 1099A is when the lender reports the amount of the debt owed, principal only, and the fair market value F MV of the secure property as the date of acquisition or abandonment of the property. Okay, this is typically used in a property like a car or a home, especially if it is repossessed or foreclosed. Okay, so it shows the fair market value versus the loan balance. So here's when it is used, okay, in foreclosures or repossessions. When a lender takes possession of a property that secured a loan because the borrower defaulted. Okay. Abandonment. When a lender has a reason to believe that the borrower has abandoned the secured property. Deed in lie of foreclosure. When a borrower voluntarily transfers the property to the lender to avoid foreclosure. Okay. It's typically for land and buildings including your homes, intangible property like stocks, patents, and other assets that don't have physical form. Physical property used in trade or business or for investment purposes. Okay. It'll break down. In essence, a 1099A form is used when a lender acquires secured property from a borrower, whether through foreclosure, abandonment, or other circumstances, and needs to report this event to the IRS to inform the borrower for tax purposes. Okay. So, a lot of people use this in the aspect of acquiring a new home or lenders, okay, use this in the aspect when things get transferred to them from the borrower, okay, to just break down the 1099A in lamest terms. All right, it also says it's for intangible property, too. Okay, so let's move on. We'll talk about the 1096. Okay, under the 1096, long story short, the 1096 is really just the summary form. This is something that you would include with your 1099s, which is more of a cover sheet. Okay? And there's many different tax forms that people will talk about and um but these are probably most common forms that are being used and are easily uh able to be spotted. Okay, this is really just a summary form. This is something that you would attach with any of your tax documentations. As you can see, you would just fill it out, you know, with your 1099. You would check off that it's a 1099. It's more of a cover sheet. Okay. So, banks file this to document how much debt was canceled across the board. So, if you have multiple forms, then you would check off multiple forms. Okay? Now, the thing is is they don't notify you. They notify the IRS because your debt has become paperwork and profit. Now, here's the part of under the Treat the Lending Act where they must notify you of these things. If they decide to take action like this, then they must notify you. As a matter of fact, they're supposed to send you documentary um reports as it pertains to this. So, if you file if they file a 1099A or 1099 C on your behalf, then they must send you a letter or a notice and provide you with the copies for the depth door, which would be the copy B. Okay? So, here's how creditors use this form to their advantage. The creditor gets a tax write off for cancelling the debt. Okay? Most people don't understand that when the company pretty much files these forms, they essentially are made whole. Everything is paid and it becomes a tax write off. Okay? So, not only does it become a tax write off, okay, when it's written off, that means that goes into the tax liability. So, whatever money that you um lost, you're going to get it right back through taxes. Okay? They may also get reimbursed through insurance or governmental programs. So, typically what happens is when they file this 1099 C and they were filed this debt as a loss, then they're going to get paid through their insurance company. Okay? Sometimes this is just a requirement of their insurance company for them to file this so that they can get reimbursed. Then also get reimbured on the tax side. Some people don't don't understand that a tax write off is literally money too because if they take it off their tax liability that's them saving money and saving money is the same as making money. Okay? And then they still try to collect from you or sell it to a debt buyer. So the aspect of them filing a 1099 C and getting the reimbursement for the cancellation making money and also it becoming a tax write off. They also try to collect it from you steal or they will just sell it to a debt buyer. Now this is where it's called double collection double recovery that is actually unjust enrichment. Okay. So if they issued a 1099 C that debt is considered extinguished under tax law. Okay. And collecting after cancellation may violate the FDCPA and the IRS rules. Okay. For those of you guys who don't know what the Fair Debt Collection Practices Act is, the Fair Debt Collection Practices Act is under 15 USC 1692. Under 15 USC 1692, you dig me? You can pull this up and it pretty much breaks down everything about the Fair Debt Collectors, fair debt collection practices. Okay? And there's a thing under unfair practices, false misleading representation, validation of debt, um furnishing deceptive forms, things of that nature that falls in line with this. And essentially, you know, anybody who is attempting to collect a debt, anybody who who can file a 1099C on your behalf, if they still try to collect, then they will be violating the Fair Debt Collection Practices Act. Now, here's the thing. Typically, after they charge off, they may be trying to collect on a debt that they've already claimed a loss for. And that is fraud. Okay. So, a lot of times we say, "Well, can we file this form and this, that, and the third?" I mean, we'll talk about that later in the video. Make sure you stay all the way to the end. Make sure you click the subscribe button. We 10 minutes in. Hit that subscribe button. Like the video. Dig me? But we're going to keep going. The fraud happens when they file when these forms get filed and they still end up trying to pay or they still end up getting you to pay. There's so many different angles you can go as it pertains to debt discharge and debt validation. And this is just one of the things that just even makes it easier and sweeter to do. Okay, here's why you probably never seen these forms. Okay, these forms are typically sent to the IRS, not you. Okay, and you may only receive a copy if the lenders comply, which many don't. Think about it. When you get a charge off, have you ever gotten a form saying, "Hey, we charged off your debt." or giving you the copy B of the charge off. Okay, essentially if I go 1099 Copy B. Okay, I go to images. See if I find one already filled out. If I show my screen right here, let me see if it'll just pull it up. No, it's not. But long story short, when you fill out a copy or when they fill out a $1099, okay, you're supposed to get copy B. Okay, this is typically what should come to you after they file that 1099. Okay, if this doesn't come to you, then they are not complying with the law. Okay, so they typically count on you not knowing what to ask for. Okay, you request a copy of your 1099 C or your 1099A filed in your name and you want to ask in your debt validation or conditional acceptance letter for it. Okay. So, a lot of times you could just simply put um in your debt validation letter, your conditional acceptance letter, hey, was a 1099 C filed? If so, can you send me the documents? Can you send me the copy B of the 1099? You can use the Freedom of Information Act request if needed. under the FOIA is essentially the federal law that grants public access to records held by federal agencies. It allows individuals to request records from these agencies with some exceptions to promote transparency and accountability. So, if a company decides, hey, you know, we're not going to send you this or we don't have it or they're going to act like they can't send it to you. You just use this federal law to your advantage. Okay? Now, just because you didn't receive it doesn't mean it wasn't filed. If you have a charge off, then it was 100% filed. If they decide not to give it to you, then they are violating the Truth and Lending Act. They are violating the FOIA. They're also violating the Fair Debt Collection Practices Act because under these acts, under these laws, rules, and regulations, they must provide disclosures on any type of use of your credit. Okay? So, let's let's let's just talk about because now we kind of talked about why you never seen it. It's just a manipulation tactic. They don't want you to know that they're doing this behind the scenes because they want to make extra money off of you. Okay. So, we're going to talk about how to use these forms in your debts remedy. Okay. Now, number one, the first thing you want to do is you want to include a demand for your 1099 C and 1099A in any dispute. Now, actually before I talk about this, make sure you guys understand that this is not legal advice. This is not financial advice. Do your due diligence and only employ these tactics after you have done your own research. Okay? And if you need to consult a tax professional and a legal representative, okay? Cuz I am not that. All right? But this is for educational purposes only. Include a demand for the 1099 C and the 1099A in any dispute. Okay? So when you are disputing it, make sure you ask for that. All right? There's nothing to be afraid of. You can ask for that. Okay? You can use them to establish the debt was canled, transferred, or discharged. So you can really shift the burden of proof on to them and have them just say it's already discharged. Okay? You build your administrative file using the affidavit of truth, using conditional acceptance, using the notice of dishonor, and all of these templates and forms are in my complete debt guide. ones that I have already pre-written. You can go edit them, change them, use it as a learning tool, whatever the case may be. That's down below in the description. Okay? But if you use these forms, you're going to be able to This builds up an administrative uh record of you communicating with the debt collector specifically about the debt. Not only talking about your truths, not only talking about shifting the burden of proof on to them using conditional acceptance, and also calling them out when they ignore you, okay? because they can't ignore you once you start that commu that line of communication. Here's the other leverage that you can use. You can use 26 USC uh 650P and essentially use that to your advantage if a company tries to make it seem like oh well um this is not what's happening. Okay. Under 26 USC 650P it just talks about how 10 how any applicable entity which discharges in whole or in parts the indebtness of any person during the calendar year shall make a return. It's essentially talking about the 1099 C and this is the law that proves that they are discharging debt. Okay, when you look at the definition of discharge, discharge means transferring the obligation from one party to the next. Okay. Or it's also a recording of a certificate of indebtness. So if this is being recorded then they are in whole and if it's part then in part but inherently if they discharge the whole debt they are in whole. All right. So no, there's there's no way where and also in the FDCPA collecting after cancellation without disclosing that fact is is equal to a deceptive practices equal to a deceptive practice. So if we go to the aspect of 15 USC 692G, we will go to um furnishing deceptive forms, false and misleading representations, unfair practices. Okay, so these are some of the vi the the the rules and violations that they'll run into. It could be aspect of unfair practices. It could be an aspect of furnishing deceptive forms, right? Giving you false or misleading representation or information. Okay? And if they do do that, then they fall under civil liability, which is essentially any debt collector who fails to comply with any provision of the subchapter with sub respect to any person is liable to such person in amount equal to the sum of any actual damage sustained by the person of such failure. And in the case of any action by individual, such additional damages as the court may allow, but not exceeding $1,000. Long story short, you can charge them $1,000 per violation. You can go even higher if you go to federal. You dig me? we talking about, you know, uh uh coercion, duress, um repeated harassment and fraud. Okay, so long story short, if they still say if they say that you still owe, make them prove it's not already been reported as discharged. Because if it's been reported as discharge, then we shouldn't even be having a communication and conversation about something I owe if you've already been made in whole. Okay. Now, I want to specifically talk about how to um advance how an advanced remedy strategy so that you can be able to use a 1099 any type of 1099 form to get remedy. Okay, so first things first, you want to send written requests for the 1099 C cancellation form. You want to send written request for 1099A abandonment form. and you want to send a written request for that 1099 I mean 1096 that summary for that year as it pertains to your account. Okay, you want to match this with your trust process. So if you have a trust, if you want to if you communicate this through your trust, then it gives you more enhanced layer of protection, but then also at the same time, you want to make sure to assign this debt to your trust if you're going through a trust. And then you want to make sure um you have that IRS dispute protection if a 1099 C triggers tax liability. So, this is where that trust comes into play because you can be able to get um protection from aspect of tax liability. Now, I'm just throwing that out there. This is not, you know, uh I'm not saying that that's 100% true, okay? I'm not trying to lead you guys down the path of not paying taxes or doing anything that may put you in a detriment. So, make sure you do your due diligence, okay? But the thing is is that the paper trail is the proof. Once they filed that 1099 C or your account is charged off and there's record of it, then all you got to do is just find the paper the paper trail. All you got to do is enforce that they give you the papers and give you the information so that you can then take that and deliver to a credit bureau. take that and use that as evidence in court if they try to have you default or if a debt buyer reaches out to you or a debt collector reaches out to you that's not the company which typically happens after they charge off the debt then you use this information and say hey the debt has already been settled and the Fair Debt Collection Practices Act actually protects me against unjust enrichment okay it protects me against double recovery okay so when it comes to the aspect of utilizing the 1099 when it comes to the aspect of, you know, challenging debt collectors. When it comes to the aspect of, you know, uh, uh, what happens behind the scenes using these 1099s or these IRS forms, you have to fully understand the how they are using this and how they using it to to not only get their money on the back end, but they're also using they're also still trying to collect. And the once you understand that this is the fraud that is happening. Okay, once you understand that it's that you know their goal is not really about the money. Okay, I'll say this all the time. It's a big energy thing and and one will say, well, if they already made money, why are they still coming after me? Well, number one, they want to make more money. But number two, it's the energy exchange. The more that you put energy into them, the more control they have over you. Okay. So, this is why we talk about this on this channel. When we look at the aspect of, you know, uh uh one, I have people reach out to me and say, "Hey, look man, I filed a 1099 C and they didn't accept it or the IRS accepted it. What do I do now?" I mean, if the IRS accepted it, then you send them copy B and let them know that it was written off. Okay. Now, I wouldn't tell a person to to to to file a 1099 C. I would just wait for them to just file and discharge it because that'll make it an easier argument. Yes, it may take much longer, but if you file the 1099 C, you're then going to have to prove not only to them, but to the IRS that you are a lender. Okay? And again, it's not that hard to to prove that to one, but you have to know have to know your stuff. You have to know the law. You have to know the truth of lending act. You got to know how to be able to argue that and prove that to them. But here's the thing. I'm not here for to prove anything to them. I'm here to have them prove it to me. Because when I have them prove it to me, then you guys are saying with your own mouth whether or not what I'm saying is true. Okay? And if what I'm saying is true and you lie to me and say that it's not true, then you are the one in violation. Versus the aspect of if I try to prove something to you, you'll just keep denying all of my claims. And what I'm going to tell you, prove that what I'm saying is not true? No. This is the truth right here. This is the law. You prove that you are above that. You prove that that what law gives you the opportunity to to to to disagree or in the aspect of when I ask you for documentary evidence and you say you can't give it to me or you give me the runaround, then I want you to know that you are just violating me. I don't give a heck about proving nothing to you. Go ahead and violate me and I'm just going to take you to court. That is how we trap debt collectors. We put them in a position where they do the work for us and then now all we have to do is just communicate that the work has already been done. Okay, that is how you challenge debt discharge. Okay, it's not just about you filing the 1099 C. It's not just about you filing the promisary note. It's not just about you filing the coupon remittance. It's more about the communication and the negotiation, shifting the burden of proof on them using affidavit of truth, using conditional acceptance, challenging their claims and have them and shift the burden of proof onto them so that they can literally back and say talk themselves into your discharge. Okay? Because take me to court on the on the premise that I didn't pay something I agreed to pay. But if I already challenge you and ask you to prove X, Y, and Z and then I will pay. I've given you an opportunity to just prove the facts to me. If you prove the facts to me, then yes, I will pay. But you decided not to prove the facts to me. So that's exactly why we are here in court. You're sitting here acting like we didn't have this discussion. Don't worry, your honor. Here is the letters. Here's the documentary evidence. Here's me literally asking them for it. Here's the evidence of the charged off debt that I've personally found, and I asked them for it, and they decided not to give it to me. Here's the evidence of the debt collector that they also sold my information to, which under the Fair Debt Collection Practices Act under uh 15 USC 1692B, it literally says acquisition of location information is also a violation. If somebody acquired my information without my consent, that is a violation. See, I could keep going down the violations under the Fair Debt Collection Practices Act before I even get to the Truth and Lending Act of how they didn't give me the proper disclosures. How they didn't they didn't inform me of their credit. They used the uninformed use of my credit. They didn't inform me the fact that they was going to file the 1099 C prior to them filing it. And then on top of that, they didn't also give me they didn't comply to the law and give me my copy B like they are supposed to. And when I asked them for it, they they they try to act like they couldn't give it to me. Okay, so before I go even more deeper into a tangent, okay, the IRS knows that your debt is discharged. Okay, that's the reality. they know it's discharged. Even if you don't, even if you don't believe what it is that I'm saying right now, I suggest you do your due diligence. I suggest you check out these forms because these forms are the evidence and once you get them, you can start building your own remedy in your legal protection. All right. So, if you want to learn more about this, tap into the debt, the complete debt guide. I have um information and templates on IRS forms. I have process on the aspect of you using them. I have prospect process on the aspect of you asking them for it and how to challenge them on it. I talk about many different things on how to be able to write these letters, the administrative process, how you're supposed to privately communicate with debt collectors. So tap into the complete debt guide. Okay, you tap into the complete debt guide. Boom. You're going to be able to learn a lot of information and get the resources and templates. So boom, that's the complete debt guide. Number two, if you want to work with me oneon-one, okay, I have a very strict one onone, okay? If you apply and I look at your questions and your questions don't align what what it is that I help one do as far as helping one fix their credit, helping one get to 100K in funding, helping one build wealth, and helping one understand consumer law so that they can be able to go and grow in their business. Do not book a call. Okay? But book a call if that's something you are attempting to doing. Okay. There's many people who will book this call and they get on the phone. They're not ready to invest in themselves. They're not ready to actually take action. They're literally just getting on the phone and wanting to ask me questions. But in order to respect both of our times, it's not about you asking questions about figuring out whether or not we should work together or not. Okay? So, if that's something you want to do and you want to be coached privately by me, tap into that one-on-one mentorship. Number two, if you want to follow me on Instagram, go ahead and follow me at biz.nick on Instagram. Also, check me out on Twitch. The link will be in the description. We are planning to do live breakdown, so make sure you tap into that. And my last question is, have you ever asked a collector for proof and they didn't get paid? Drop a comment down below. Remember to like, subscribe, turn on the post notifications because they profit from your silence, but not anymore. I love you guys. If you got this far, comment the word discharge. Happy Friday and I'll see you in the next one. H.