Currently the IRS requires debtors to pay tax on discharged debt as income. However, after paying the inflated income tax amount the creditor can continue to pursue payment of the same debt. If the debt is paid to the creditor and the 3 year time limit on amending personal taxes has passed the debtor has been penalized by paying the debt plus interest and the taxes paid to the IRS on phantom income. This is like kicking someone when they are down. Either allow special tax amendment rules (allowing amendments whenever the debt is settled) in these cases or make the filing of a 1099-C a final determination of discharge / cancellation of the debt.
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