Debts that are discharged through bankruptcy proceedings are not subject to income tax based on cancellation of indebtedness. Therefore the 1099-C you received from your previous creditor is in error. Normally you would use IRS Form 982 to report the 1099-C and state that you have received a discharge and you will not be taking the amount as income. Since your return has already been filed you will need to provide the IRS with a copy of your creditor matrix and discharge from your chapter 7 bankruptcy. The IRS only has the 1099-C they do not have your bankruptcy information until you provide it to them. From your comment I see that you’ve already provided this information so you’re on the right track. If you feel that you need professional assistance in dealing with the IRS give us a call and we can assist you in resolving this issue. Thanks.