Section 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.