Jump to content
VA Disability Community via Hadit.com

VA Disability Claims Articles

Ask Your VA Claims Question | Current Forum Posts Search | Rules | View All Forums
VA Disability Articles | Chats and Other Events | Donate | Blogs | New Users

  • hohomepage-banner-2024-2.png

  • 27-year-anniversary-leaderboard.png

    advice-disclaimer.jpg

  • donate-be-a-hero.png

  • 0

IRS saying I owe them $$$

Rate this question


rpowell01

Question

Received a letter today from the IRS and they are stating that since my students loans were discharge/foregiven I now owe them some $$$ because I didn't add the student loans discharge as income to my 2014 taxes. My student loans were discharged because I became too disabled to work and I was awarded TDIU retro back to July 2013.

What are my options? Should I go ahead and pay it or is there something like a benefit for disabled veterans so this should not be included as income?

 

 

Link to comment
Share on other sites

  • Answers 8
  • Created
  • Last Reply

Top Posters For This Question

Recommended Posts

  • 0

Yep if your student loans are discharged VA disability or not they are taxable. IRS doesn't care they want the big $$$$....I was blessed because a week before I received that letter the VA sent me a 5 digit retro they owed me of TDIU I humbly requested they owed me. Its like the IRS knew or the VA tipped them off or something. 

I didn't know the loans were taxable myself but I am grateful I no longer have that debt hanging over my head. I sent them a cashiers check the next day and boom it was settled. I could have gotten an attorney, paid the attorney's fee to have gotten it lowered but you know what the attorney's fees would have been more than what I could have saved on getting the tax lowered. I am all good now and received the $0 balance letter from the IRS and a thank you.

Link to comment
Share on other sites

  • 0
6 hours ago, rpowell01 said:

Yep if your student loans are discharged VA disability or not they are taxable. IRS doesn't care they want the big $$$$....I was blessed because a week before I received that letter the VA sent me a 5 digit retro they owed me of TDIU I humbly requested they owed me. Its like the IRS knew or the VA tipped them off or something. 

I didn't know the loans were taxable myself but I am grateful I no longer have that debt hanging over my head. I sent them a cashiers check the next day and boom it was settled. I could have gotten an attorney, paid the attorney's fee to have gotten it lowered but you know what the attorney's fees would have been more than what I could have saved on getting the tax lowered. I am all good now and received the $0 balance letter from the IRS and a thank you.

I bet they thanked you. If that VA settlement was your main source of money, then, from what I understand, could have gotten off the hook for nothing if ANY pay is from a disability or injury. But I see how closely they follow you every 4 months so they can make you freak out for a quick payoff. Depending on your balance, an applicable lawyer would only be a percentage of what they save you (I better start looking for a lawyer too after I talk to my accountant.) 

It's easy to understand what you mean about being clear and free, but I owe others who helped me in hard times: and not loan companies charging ridiculous high interest rates most jobs could not realistically pay back easily. Education in Recessions are a scam, pure and simple. So in my particular situation, I'm going to research mine thoroughly. People are getting off who are defaulting on loans in hardship cases, so I'm going to hold on to my tax free earnings with a tight fist. In effect, you gave them approximately 130% of what you paid them, when you include tax benefits. I know everyone's situation is different though.

**************************************************

For example: "Insolvency Exclusions" (that's me!) Of course it might not be exactly this simple, nor be 100% of tax, and it might be exactly what both your accountants did!

http://abcnews.go.com/Business/cancelled-student-loan-debt-creates-tax-nightmare/story?id=16086241

Another option, the insolvency exclusion, which requires debtors to be insolvent immediately prior to the discharge, may have allowed her to avoid paying taxes on some or all of the $91,000 of CODI. 

https://www.irs.gov/uac/what-if-i-am-insolvent

What if I am insolvent?

A taxpayer is insolvent when his or her total liabilities exceed his or her total assets. The forgiven debt may be excluded as income under the "insolvency" exclusion. Normally, a taxpayer is not required to include forgiven debts in income to the extent that the taxpayer is insolvent. 

**********************************************************

There is some decent initial research anyway. ymmv.

Edited by armorer
Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...

Important Information

Guidelines and Terms of Use