Tuesday, September 1, 2009
IRS Expands Use of Reported Interest on Mortgage Payments
Banks and other mortgage lenders provide annual statements to the borrowers and the IRS of the mortgage interest they paid. The IRS can use the data to confirm the amount of an interest deduction claimed by the borrower. The data can also be used to identify potential nonfilers. The Wall Street Journal reports here that the IRS is now poised to use the data to identify discrepancies between the reported interest paid and a taxpayer's income.