Cancelled Debt Insolvency worksheet Form 982

I've never had a 1099-c from a credit card company where the client was insolvent

Basic questions: do they own a home? do they have any retirement accounts? if so, that's the end of it there. 

Ive had the situation several times, not recently though, never had an issue that required additional documents to be sent.

I have the client fill out their assets and liability on that insolvency worksheet to make sure they are insolvent.

The chances of an IRS audit for this are the same as those for anything else:  minuscule to none.  It depends on the amount, $50,000 might make an audit twice as likely as $5,000.  but as @kobe22 notes, it may be difficult to show insolvency because assets are considered that would have been exempt had they filed bankruptcy (and the debt cancellation would automatically be nontaxable).  The bank (or more likely, collection agency) recognized that they had no assets that they couldn't keep in bankruptcy; the taxpayer chose to pay something, to avoid that.