Paid collection company, "paid in full" as they say.....

More here

OK, I'm attempting to dispute this with my credit card company because I didn't expect a 1099-C.

Are you saying I have no case?

I know a little more now. Sounds like they have to, by law, issue the 1099-C if the paid amount is less than the full amount.

So I guess the real problem is that the 1099-C was exaggerated by a few thousand dollars. As the collector is trying to place me liable for the commission the collection agency charged them.

Anyone know if this is legal?

Do you have a settlement agreement with your collector or the collection agency? Debt is defined as "any amount owed to you including stated principle, stated interest, fees, penalties, administrative costs, and fines" Source

I'm not a CPA (and you really should find one to talk to) but if the charges of the collection agency are being considered an administrative cost, then it would qualify as debt. What does your settlement agreement say?

I do not have a settlement agreement.

They reported to the MIS database (some financial database) the correct amount written off, but then add a few thousand to that on my 1099-C.

Seems conflicting?

So, here's my summary. In disputing with the credit card company, I don't have a whole lot of legal basis to win a chargeback, and in the end I might just be wasting my time.

But I would not have done this (paid the collection agency) if I knew it would cost me another $3000 in taxable income on a 1099-C.

So, we'll leave it in the hands of the credit card agencies. If I win I'll just get a larger 1099-C for this year, and have extra money to pay the taxes. If I lose, then life goes on with me having quite a bit more income than expected .