§ 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.

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