Can an individual voluntarily report the debt as income - and pay income taxes on it - without having received a 1099c Cancellation of Debt form by the bank?
Or is the issuance of a 1099c required to declare the debt as income and pay the requisite income tax?
This concerns CC debt that is well beyond the SOL. My understanding is that there's no SOL for a bank to cancel the debt and issue a 1099c to the debtor, and there's no clear rhythm of reason: a bank cancel the debt in 5 yrs., a decade, or several decades. Conversely, the debt could never be cancelled by the bank in which case it may be advantageous to do nothing in the hopes that the bank(s) never issue a 1099c, thus the debtor need not pay the income tax.
OTOH, it seems it could be beneficial for the debtor to voluntarily claim the debt as income on their tax returns and pay income taxes on it. Is this possible? For ex. in the scenario where one's income tax bracket for a particular year is very low, choosing to pay the tax on a particular debt(s) at that time could minimize the amount of tax paid on the debt vs. the worst case scenario of all remaining debts cancelled the same year w/1099's issued and the taxpayer's income placing them in a highest tax rate bracket that year, thus maximizing the taxes paid on the debt.
Thanks for any input.