Zakat on Bad or Doubtful Receivables

Short answer: No. A receivable from a denying, absconding or insolvent debtor is a 'weak debt' — no zakat while recovery is uncertain. Upon recovery, the sounder view starts a fresh hawl from that day; paying one year's zakat immediately on recovery is a commendable precaution held by some scholars. Details: Zakat presumes complete ownership and control; taxing wealth that may never return year after year would burden beyond capacity. Athar from Ali and Ibn Abbas (ra) suspend zakat on such inaccessible wealth. If the debtor is genuinely poor, granting time is a Quranic command and forgiving the loan is better still — but a forgiven amount cannot be counted as your zakat (zakat requires actually transferring wealth — tamlīk). Evidence: Quran 2:280 (respite for the hard-pressed debtor); Quran 2:286; Ibn Majah 1792 (hawl); the Permanent Committee and Shaykh al-Uthaymin on uncollectible debts. For complex individual cases, consult a qualified scholar.