§  1.1950   Reporting discharged debts to the Internal Revenue Service.

   (a) In accordance with applicable provisions of the Internal Revenue
   Code and implementing regulations (26 U.S.C. 6050P; 26 CFR 1.6050P-1),
   when the Commission discharges a debt for less than the full value of
   the indebtedness, it will report the outstanding balance discharged,
   not including interest, to the Internal Revenue Service, using IRS Form
   1099-C or any other form prescribed by the Service, when:

   (1) The principle amount of the debt not in dispute is $600 or more;
   and

   (2) The obligation has not been discharged in a bankruptcy proceeding;
   and

   (3) The obligation is no longer collectible either because the time
   limit in the applicable statute for enforcing collection expired during
   the tax year, or because during the year a formal compromise agreement
   was reached in which the debtor was legally discharged of all or a
   portion of the obligation.

   (b) The Treasury will prepare the Form 1099-C for those debts
   transferred to Treasury for collection and deemed uncollectible.