short sale, or if you give the home back to your lender in satisfaction of your debt, IRS Tax Fact 10 tells us to watch for a 1099-C or 1099-A statement in the mail during the next calendar year. Lenders are required to send the 1099 forms by the last day of February in the year following the tax year in which debt cancellation or forgiveness occurs. When you get the 1099-C, look at it carefully. If you think something is wrong on the notification, call the lender who issued the statement and see if you can get them to correct it. This is easier said than done but the IRS recommends that you take this course of action.