Treasury Department Final Rule

2016-27160: Removal of the 36-Month Non-Payment Testing Period Rule

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Summary

This document contains final regulations that remove the rule that a deemed discharge of indebtedness for which a Form 1099-C, "Cancellation of Debt," must be filed occurs at the expiration of a 36-month non-payment testing period. The Treasury Department and the IRS are concerned that the rule creates confusion for taxpayers and does not increase tax compliance by debtors or provide the IRS with valuable third-party information that may be used to ensure taxpayer compliance. The final regulations affect certain financial institutions and governmental entities.

The agency’s own summary, as published.

What this changes

Amends 1 part of the Code of Federal Regulations — the standing rules this notice rewrites.

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