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When Kim Thompson’s $91,000 apprentice accommodation antithesis was annulled due to absolute disability, she anticipation she had put at atomic one of her problems abaft her. Instead, she traded it for another: a massive debt to the IRS.

Two years ago, Thompson, who lives in New Jersey, was diagnosed with a bump that eventually led to the abatement of best of her baby intestine, a pulmonary emism, and 12-hour-a-day IV agriculture sessions. She retired from her job on a affliction alimony in July 2010, and was able to get her federal apprentice loans cancelled.

There was no mention, however, that the debt would be appear to the IRS as Abandoning of Debt Assets (CODI).

“They didn’t acquaint me it was taxable income,” she says. “I had no idea.”

The IRS considers best types of annulled debt taxable income. Lenders charge address annulled debts of $600 or added to the IRS on a 1099-C form. The IRS estimates some 6.3 actor 1099-C’s – for all types of debts, including apprentice loans, acclaim cards, mortgages, etc. – were filed this year advertit CODI for the 2011 tax year.

[Related Story: Democratic Lawmakers Push for Apprentice Accommodation Debt Forgiveness]

Not all annulled apprentice accommodation debt is taxable. If Thompson’s debt had been

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