Student Loan and Implied Income (pay, taxes, debts, mortgage)

[CR Boston]

I didn't pay off my student loans 25 years ago and my debt was written off. The IRS declared the write off as "Implied Income" and levied income taxes on it. Now, I am being forced to pay both the student loan payment and the income tax payment which are deducted from my Social Security payments. I've tried everything I can think of to pay one or the other. Anyone have any suggestions other than bending over?

[MPRetired]

Assuming it is normal social security and not supplemental social security income, the IRS is one of the few agencies that can garnish your social security.

Can Social Security Be Garnished? | Bankrate.com

If I am reading this correctly, they can garnish up to 30% (15% for the taxes and 15% for the delinquent student loans).

[MrRational]

Originally Posted by CR Boston

I didn't pay off my student loans 25 years ago...
The IRS...
Anyone have any suggestions other than bending over?

That's funny.

[freemkt]

If you are still liable for the student loan, you should not have been assessed a tax on the amount of "imputed income".

You clearly owe ONE of these debts but not both.

[ncole1]

Originally Posted by freemkt

If you are still liable for the student loan, you should not have been assessed a tax on the amount of "imputed income".

You clearly owe ONE of these debts but not both.

Yes. OP should consult a tax attorney. I think there is a case here - either the debt was forgiven or not. It can't be both ways. Sorry IRS.

[MrRational]

Originally Posted by ncole1

- either the debt was forgiven or not.

NOT.

It was written off per the OP.
This is a tax and accounting practice not some sort of magnanimity toward deadbeats.

[ncole1]

Originally Posted by MrRational

NOT.

It was written off per the OP.
This is a tax and accounting practice not some sort of magnanimity toward deadbeats.

Then it isn't cancelled debt.

[freemkt]

Originally Posted by MrRational

NOT.

It was written off per the OP.
This is a tax and accounting practice not some sort of magnanimity toward deadbeats.

In which case, levying tax n the balance is some sort of anti-magnanimity toward deadbeats.

[MrRational]

Originally Posted by freemkt

In which case, levying tax on the balance is...

is about characterizing the money benefit previously received as tuition etc as ordinary income.
The debt amount, written off against taxes, doesn't just disappear.

A tax is owed on income from any source.
Similar happens with mortgage foreclosure and short sales.
Short Sale Tax Implications | Nolo.com

[ncole1]

Originally Posted by MrRational

is about characterizing the money benefit previously received as tuition etc as ordinary income.
The debt amount, written off against taxes, doesn't just disappear.

A tax is owed on income from any source.
Similar happens with mortgage foreclosure and short sales.
Short Sale Tax Implications | Nolo.com

Is isn't income if you have to pay it back.