There's an argument that Chapter 13 Trustees should, at least in some plans, be sending debtors 1098s.
From the IRS instructions:
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Collection agents. Generally, if you receive reportable interest payments (other than points) on behalf of someone else and you are the first person to receive the interest, such as a servicing bank collecting payments for a lender, you must file this form. Enter your name, address, TIN, and telephone number in the recipient entity area. You must file this form even though you do not include the interest received in your income but you merely transfer it to another person. If you wish, you may enter the name of the person for whom you collected the interest in box 10. The person for whom you collected the interest need not file Form 1098.
However, there is an exception to this rule for any period that (a) the first person to receive or collect the interest does not have the information needed to report on Form 1098, and (b) the person for whom the interest is received or collected would receive the interest in its trade or business if the interest were paid directly to such person. If (a) and (b) apply, the person on whose behalf the interest is received or collected is required to report on Form 1098. If interest is received or collected on behalf of another person other than an individual, such person is presumed to receive the interest in a trade or business.
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Governmental unit. A governmental unit (or any subsidiary agency) receiving mortgage interest from an individual of $600 or more must file this form.
(Red emphasis added above.)
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When its a simple cure and maintain plan, regardless of whether the on-going payment is made directly or through a conduit, the trustee meets both criteria for the exception, namely she doesn't have the month by month break down of the interest and principal and the mortgage servicer, for whom the payment is collected, would better be able to provide that 1098 to the debtor/homeowner/taxpayer.
But when the home mortgage is being paid in full or crammed down during the plan, since the Trustee is presumably paying the Till rate, which is likely different from the contract rate, on the claim, she's the one that knows which portions of disbursements are for interest. It doesn't require much skepticism about the competence of mortgage servicers to question whether 1098s in these cases would accurately report interest paid.
I don't know how common that is in San Francisco, where the author is, but in North Carolina and elsewhere, plans regularly have mobile homes or modest 2nd mortgages that get paid either in full or FMV. Failing to send Debtors a 1098 could not only be problematic under the IRC, but also fail to maximize tax refunds for the benefit of the debtor and, more importantly from the Trustee's perspective, the estate.
Even further would be the question of whether, when paying interest to unsecured creditors, because the non-exempt equity in the debtor's home requires a 100% dividend, whether that plan in effect "secures" those creditors making that interest deductible and a 1098 appropriate.
To read a copy of the transcript, please see:
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