Complaint Review: Citibank

Someone is making money from this situation, and maybe this information will help.

I am a private income tax preparer and have been working with my client for over 10 years.  I am available year-round and handle all IRS inquiries regarding proof of income, Amended Returns, etc.

My client received an IRS inquiry stating that he did not report 1099C Cancellation of Debt income in 2009. The IRS stated that the creditor "Citibank" has cancelled a debt on 4-24-2009, and the tax burden on this additional "income" would be $528, which includes interest.

Problem is, my client NEVER did business with Citibank. So I took the address above and wrote to it, armed with copies of the IRS information, as well as Power Of Attorney (Form 2848) giving me permission to discuss his finances with the IRS and other entities (Since I have his SS# and other personal information).

Never received a response. 

I contacted the IRS for follow-up and they sent me the following address:

Citibank South Dakota, NA

Payroll Manager

242 Trumbull Street, Suite 3

Hartford, CT  06103

I wrote to them with the same information, attachments, and Form 2848 - Never received a response.

I contacted the IRS again to explain the situation, but they need the "Cancellator" or Originator to contact them to verify that this is NOT my clients' social security number and NOT his debt, in order to remove the additional income tax.

I've called Citibank Business Payroll, they have no information.  I've contacted every branch of Citibank to locate the Payroll Manager in Hartford CT, but the address doesn't exist for Citibank. 

The only thing there is a Credit Union that has absolutely No association with Citibank!

The irony is, the mail that I wrote to both the 242 Trumbull Street, Suite 3 AND the Citibank at 701 E 60th Street N, Sioux Falls, SD  57104, were received by "someone" because they weren't returned to me as a "Return To Sender" so they (the addresses) have to exist!

And of course, they have no telephone numbers.

I am going to copy the website information here and send it to the IRS.  Maybe our Government will launch an investigation and find out WHO is doing this to rip off the public.

I went through this situation a few years back. I found out alot of interesting info, most of it GOOD!

ONLY the "original creditor who actually loaned the money can issue the 1099C and "forgive" the debt. DEBT COLLECTORS CANNOT issue these! That is FRAUD!

HOWEVER, the 1099C MUST BE ISSUED in the same tax year as the debt was forgiven in. Which means, if they were to have forgiven the debt in June of 2009, they were REQUIRED to get that 1099C to you NO LATER THAN Jan 31 2010. NO EXCEPTIONS!

In some situations, the 1099C is the best thing you can hope for! This is because once the original creditor has issued the 1099C, the debt is "FORGIVEN". It is now dead. It cannot be resold or assigned for further collections, and depending on your tax bracket, you may have just "settled" your debt for 15 cents on the dollar!

Here's what you do now. Go to the IRS website and obtain the "TAXPAYER FRAUD" affidavit, I forget the form number. Fill it out and explain that this 1099C was issued illegally, and that you never obtained any cash income from the "taxpayer" who sent the 1099C. Send this via certified mail, return reciept requested, and put the certified# on the letter itself and keep a copy for your records.

Save a copy of the above letter for when you do your taxes for this year, just in case there is a problem.

Now, file an FTC complaint for the creditor / collector refusing your request for debt validation. This is a FDCPA violation, and it is worth up to $1000, plus costs if you take it to court.

Remember, STAY OFF THE PHONE!! All communications MUST be in writing and by certified means.

Good luck!

You say that the debt was forgiven on August 20, 2009.  Forgiven by whom?  Citibank?  For how much?  $3900?  I'm guessing it was charged off as banks don't simply forgive debts of us mere mortals.

You then say you got a collection notice in June of 2009 about the debt.  Did you mean 2010?  If not, why wait a year to complain?  If you got the notice before the debt was forgiven, perhaps one hand did not know what the other was doing at Citibank?  If you got the notice after, there is nothing wrong with collecting on a charged off debt.  Your issues with validation are with the collections company, not Citibank.

Now about that 1099-C .  The IRS considers a charged off account as income so the bank must send you a 1099-C to report that income.  I'm guessing Citibank owned and charged off the account so they may have just been slow getting your paperwork out, unless you have the years wrong somewhere in your report.

In other words, the collection efforts against you and the 1099-C from Citibank are separate matters so to speak.  Your request for validation may have triggered the 1099-C though.  Maybe you got missed when Citibank did 1099-Cs last year.  You request validation and the debt collector requests the validation from Citibank.  Citibank responds to the collector in some fashion while also noticing they forgot to 1099-C you. So they do.  Again, a lot rests on the accuracy of the dates you have given.

www.budhibbs.com and check out these scumbags

Bud Hibbs has a lot of good info on the 1099c scam

http://www.budhibbs.com/ASSIRS.htm

http://www.budhibbs.com
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