The American IRS Says "You're right!" And Takes $109,000 US Off My Wife's 2009 Income

Elena settled some $140,000 in credit card debt last year. She was left with four 1099 income statements for 2009 . The total was $109,000. I read the New York Times. It said that if the taxpayer is insolvent, they do not have to report the forgiven income. Insolvency could be proven by an actual bankruptcy filing or a simple list of assets and liabilities. My wife would never go bankrupt. I submitted to the IRS a simple list of her assets and liabilities showing that she had a negative net worth (As a result of the awful housing crash). I got two nice letters from the IRS yesterday. They agreed with me and adjusted her 2009 income down $109,000, I saved her some $40,000 in state and Federal taxes. HOW SWEET IT IS!!