I settled a credit card lawsuit and made the final payment of the settlement (agreed judgment) in mid-December 2012. I received a release of judgment lien in late December 2012. The settlement was for less than the amount owed, so I believe this is considered cancelled debt.

However, I have not received a 1099-C from the creditor, and I have not been able to get ahold of someone from the creditor (Citibank) to find out if they have sent a 1099-C to the IRS.

According to IRS Publication 4681, "Even if you did not receive a Form 1099C, you must report canceled debt as gross income on your tax return unless one of the exceptions or exclusions described later applies." FYI, I am not insolvent and don't qualify for any other exceptions listed in that publication either.

My concern is if I report the cancelled debt on my 2012 tax return and pay the resulting additional taxes but Citibank did not or does not end up reporting the cancelled debt for tax year 2012. Fast forward to January 2014 and I get a 1099-C for 2013. Now the IRS thinks I should be reporting additional income for 2013, but I would have already reported it and paid the taxes on my 2012 return.

Would I be able to file some form which says I don't owe additional taxes on this debt because I already paid for it on my 2012 tax return? Or could I amend my 2012 tax return at that point to remove the cancelled debt (and get a refund), and then report the 1099-c on my 2013 tax return?

Part of me says to not report it on my 2012 return since I don't know if the debt has been officially cancelled, nor do I know the exact amount of the debt that was cancelled (at least according to the creditor). But I don't want to get a letter from the IRS later this year stating I owe them money with late fees and interest added.

Please, I need some help from a tax guru. Thank you in advance.