WASHINGTON -- The Internal Revenue Service will expand a program designed to catch tax cheats that searches for inconsistencies between mortgage payments and income.
After prompting from an IRS auditor, the agency will study whether it should make greater use of data on mortgage-interest payments provided to it by banks. The IRS currently uses such data to send notices to non-filers who it believes should have filed a return.
The data could also be used to target for audits individuals who don't file tax returns, or who report less income than they paid in mortgage interest, according to a letter released Monday by the Treasury inspector general for tax administration.
The IRS move will expand a regional research project on mortgage interest to a nationwide level by December 2011. Such initiatives, called Compliance Initiative Projects, typically involve examination of a small number of tax returns to evaluate new enforcement strategies.
Howard Levy, a tax attorney with the Cincinnati firm Voorhees Levy, said mortgage-interest data might be the best source of information the IRS has on small-business owners, such as roofers or carpenters, who are paid in cash and don't report all their income to the IRS.
"That [IRS Form] 1098 might be one of the few trails IRS could pursue to find out if there is income coming in," Mr. Levy said.'
Pay your mortgage .... get an audit .. makes sense to me.
No comments:
Post a Comment
Spamming will be removed.
Due to spamming. Comments need to be moderated. Your post will appear after moderated regardless of your views as long as they are not abusive in nature. Consistent abusive posters will not be viewed but deleted.
Note: Only a member of this blog may post a comment.