I never rec'd a 1099 for a "cash for keys" buyout back in 2011. I forgot about it and therefore didn't add it as income on my taxes. I didn'...

Question

I never rec'd a 1099 for a "cash for keys" buyout back in 2011. I forgot about it and therefore didn't add it as income on my taxes. I didn't even know that I should've reported it. The IRS has now contacted me for the money. Am I responsible for the penalties and interest considering this was an oversight on my part? Wasn't it the loan servicing company's responsibility to send me a 1099?

Answer

The fact that someone who paid you money did not issue a 1099 is between them and the IRS. It does not relieve you of your responsibility to report the income.