The past keeps catching up

Reporting an income of $128,645.76 to the IRS would actually be pretty exciting to me. In fact, that's just under 3 years' worth of income for me. Too bad this came by way of a 1099 and an amount of debt cancelled. By the way, debt cancelled is considered income, even though that money never touched my bank account. And it is also taxed as income, meaning it faces the same 23% (or so) I would normally pay on any real wages. We are trying to find a way to work around this one.... there are some laws protecting certain groups of people and there are some other ways around it (none that I understand or am ready to try just to see what happens). Today I am *hopefully* meeting with my boss's tax consultant to see what he can do. Keep your fingers crossed! I definitely don't have $30,000 hiding in my closet that I can pay the IRS thanks to a short sale on my condo.