The lender is usually required to report the amount of the canceled debt to you and the IRS on a Form 1099C, Cancellation of Debt. Explain to them that you need a payoff statement so you can have this debt paid off within your refinance.Example of a Gift Letter. A couple meeting with a mortgage lender to submit a gift letter. SAMPLE. Page 58. 6-4. A tax return is not filed on time. Identify the issue: tax lien or tax debt? Typically, IRS debt racks up when you underestimate the amount you'll make in a given year. Why did I get less money in a federal payment (for example, my tax refund) than I expected? You paid a portion of the mortgage interest or state and local real property taxes from your own sources.