Bloomberg Bloomberg
Comprehensive Tax Research. Practitioner to Practitioner. ®

Sec. 6050P. Returns Relating To The Cancellation Of Indebtedness By Certain Entities

I.R.C. § 6050P(a) In General
Any applicable entity which discharges (in whole or in part) the indebtedness of any person during any calendar year shall make a return (at such time and in such form as the Secretary may by regulations prescribe) setting forth—
I.R.C. § 6050P(a)(1)
the name, address, and TIN of each person whose indebtedness was discharged during such calendar year,
I.R.C. § 6050P(a)(2)
the date of the discharge and the amount of the indebtedness discharged, and
I.R.C. § 6050P(a)(3)
such other information as the Secretary may prescribe.
I.R.C. § 6050P(b) Exception
Subsection (a) shall not apply to any discharge of less than $600.
I.R.C. § 6050P(c) Definitions And Special Rules
For purposes of this section—
I.R.C. § 6050P(c)(1) Applicable Entity.
--The term “applicable entity” means—
I.R.C. § 6050P(c)(1)(A)
an executive, judicial, or legislative agency (as defined in section 3701(a)(4) of title 31, United States Code), and
I.R.C. § 6050P(c)(1)(B)
an applicable financial entity.
I.R.C. § 6050P(c)(2) Applicable Financial Entity
The term “applicable financial entity” means—
I.R.C. § 6050P(c)(2)(A)
any financial institution described in section 581 or 591(a) and any credit union,
I.R.C. § 6050P(c)(2)(B)
the Federal Deposit Insurance Corporation, the Resolution Trust Corporation, the National Credit Union Administration, and any other Federal executive agency (as defined in section 6050M), and any successor or subunit of any of the foregoing,
I.R.C. § 6050P(c)(2)(C)
any other corporation which is a direct or indirect subsidiary of an entity referred to in subparagraph (A) but only if, by virtue of being affiliated with such entity, such other corporation is subject to supervision and examination by a Federal or State agency which regulates entities referred to in subparagraph (A), and
I.R.C. § 6050P(c)(2)(D)
any organization a significant trade or business of which is the lending of money.
I.R.C. § 6050P(c)(3) Governmental Units
In the case of an entity described in paragraph (1)(A) or (2)(B), any return under this section shall be made by the officer or employee appropriately designated for the purpose of making such return.
I.R.C. § 6050P(d) Statements To Be Furnished To Persons With Respect To Whom Information Is Required To Be Furnished
Every applicable entity required to make a return under subsection (a) shall furnish to each person whose name is required to be set forth in such return a written statement showing—
I.R.C. § 6050P(d)(1)
the name and address of the entity required to make such return, and
I.R.C. § 6050P(d)(2)
the information required to be shown on the return with respect to such person.
The written statement required under the preceding sentence shall be furnished to the person on or before January 31 of the year following the calendar year for which the return under subsection (a) was made.
I.R.C. § 6050P(e) Alternative Procedure
In lieu of making a return required under subsection (a), an agency described in subsection (c)(1)(A) may submit to the Secretary (at such time and in such form as the Secretary may by regulations prescribe) information sufficient for the Secretary to complete such a return on behalf of such agency. Upon receipt of such information, the Secretary shall complete such return and provide a copy of such return to such agency.
(Added Pub. L. 103–66, title XIII, §13252(d), Aug. 10, 1993, 107 Stat. 532; amended Pub. L. 104-134, title II, ch. 10, 31001, Apr. 26, 1996, 110 Stat. 1321; Pub. L. 106-170, title V, Sec. 533, Dec. 17, 1999, 113 Stat. 1860.)
BACKGROUND NOTES
AMENDMENTS
1999--Subsec. (c)(2)(B)-(D). Pub. L. 106-170, Sec. 533(a), deleted “and” at the end of subpar. (B); substituted “, and” for “.” at the end of subpar. (C) and added subpar. (D).
1996--Pub. L. 104-134, title II, 31001(m), Apr. 26, 1996, 110 Stat. 1321, substituted “certain entities” for “certain financial entities” in the heading.
Subsec. (a). Pub. L. 104-134, 31001(m), substituted “applicable entity” for “applicable financial entity”.
Subsec. (c). Pub. L. 104-134, 31001(m), redesignated pars. (1) and (2) as pars. (2) and (3), respectively; added a new par. (1); substituted “(1)(A) or (2)(B)” for “(1)(B)” in redesignated par. (3).
Subsec. (d). Pub. L. 104-134, 31001(m), substituted “applicable entity” for “applicable financial entity”.
Subsec. (e). Pub. L. 104-134, 31001(m), added subsec. (e).
EFFECTIVE DATE OF 1999 AMENDMENTS
Amendment by Sec. 533(a) of Pub. L. 106-170 applicable to discharges of indebtedness after December 31, 1999.
EFFECTIVE DATE OF 1996 AMENDMENTS
Amendments by Sec. 31001(m) of Pub. L. 104-134 applicable on April 26, 1996.
EFFECTIVE DATE
Pub. L. 103–66, §13252(d), provided that:
“(1) In general.—Except as provided in paragraph (2), the amendments made by this section [enacting this section and amending section 6724 of this title] shall apply to discharges of indebtedness after December 31, 1993.
“(2) Governmental entities.—In the case of an entity referred to in section 6050P(c)(1)(B) of the Internal Revenue Code of 1986 (as added by this section), the amendments made by this section shall apply to discharges of indebtedness after the date of the enactment of this Act [Enacted: Aug. 10, 1993].”
ALLOWANCE OF ELECTRONIC 1099S
Sec. 401 of Pub. L. 107-147 provided that:
“Any person required to furnish a statement under any section of subpart B of part III of subchapter A of chapter61 of the Internal Revenue Code of 1986 for any taxable year ending after the date of the enactment of this Act, may electronically furnish such statement (without regard to any first class mailing requirement) to any recipient who has consented to the electronic provision of the statement in a manner similar to the one permitted under regulations issued under section 6051 of such Code or in such other manner as provided by the Secretary.”
EXCLUSION OF CERTAIN CANCELLATIONS OF INDEBTEDNESS
Sec. 105 of Pub. L. 107-134 provided that:
“(a) IN GENERAL- For purposes of the Internal Revenue Code of 1986--
“(1) gross income shall not include any amount which (but for this section) would be includible in gross income by reason of the discharge (in whole or in part) of indebtedness of any taxpayer if the discharge is by reason of the death of an individual incurred as the result of the terrorist attacks against the United States on September 11, 2001, or as the result of illness incurred as a result of an attack involving anthrax occurring on or after September 11, 2001, and before January 1, 2002, and
“(2) return requirements under section 6050P of such Code shall not apply to any discharge described in paragraph (1).
“(b) EFFECTIVE DATE- This section shall apply to discharges made on or after September 11, 2001, and before January 1, 2002.”