Consumer complaint received 2023-07-16
Company: UNITED SERVICES AUTOMOBILE ASSOCIATION
State: NC
Product: Debt collection
Sub-product: Other debt
Issue: Written notification about debt
Sub-issue: Didn't receive enough information to verify debt

Complaint:
USAA never issued me a XXXX for a charge off reporting on my credit report showing a charged off balance of {$11000.00} opened XXXX closed XXXX. I try logging in to my usaa account about this and they will not allow me to log in using my username. i tried to reset my password through my phone and email but there is nothing they will do. 

Generally, a creditor must file a Form 1099-C if : ( 1 ) debt in the amount of {$600.00} or more has been discharged ; ( 2 ) the creditor is an applicable entity; and ( 3 ) an identifiable event has occurred. A Form 1099-C must be filed in the year following the calendar year in which the identifiable event occurs ( XX/XX/XXXX to debtor ; XX/XX/XXXX to the IRS if paper-filed, and XX/XX/XXXX to the IRS if e-filed ) XXXX Finally, the only cancelled or discharged debt that must be reported on a Form 1099-C is the principal amount of the debt owed ; however a creditor may report the interest and penalties forgiven if it so chooses.

The pertinent Treasury Regulation defines indebtedness for Form 1099-C reporting purposes as any amount owed to an applicable entity, including stated principal, fees, stated interest, penalties, administrative costs and fines. The amount of indebtedness discharged may represent all, or only a part, of the total amount owed to the applicable entity. Treas. Reg. 1.6050P-1 ( c ). An applicable entity includes government agencies ( including the Small Business Administration ) and applicable financial entities, which consist of financial institutions ( their subsidiaries ), credit unions, the Federal Deposit Insurance Corporation, and any organization a significant trade or business of which is the lending of money. IRC 6050P ( c ).

An identifiable event generally triggering a Form 1099-C reporting obligation includes : ( 1 ) a bankruptcy discharge ; ( 2 ) a cancellation/extinguishment that renders a debt unenforceable in a receivership, foreclosure, or similar proceeding ; ( 3 ) a cancellation upon the expiration of the statute of limitations for collection of an indebtedness or upon the expiration of a statutory period for filing a claim or commencing a deficiency judgment proceeding ; ( 4 ) a cancellation pursuant to an election of foreclosure remedies by a creditor that statutorily extinguishes or bars the creditor 's right to pursue collection of the indebtedness; ( 5 ) a cancellation that renders a debt unenforceable pursuant to a probate or similar proceeding ; ( 6 ) a discharge pursuant to an agreement between an applicable entity and a debtor to discharge indebtedness at less than full consideration; and ( 7 ) a discharge pursuant to a decision by the creditor, or the application of a defined policy of the creditor, to discontinue collection activity and discharge debt. 

The failure by a creditor to file a Form 1099-C may result in penalties under IRC 6721 and 6722. The amount of penalty for the failure to file a correct Form 1099-C by the due date ( IRC 6721 ) is based on when the Form 1099-C is filed :

Company response to consumer: Closed with explanation