Real Estate Investors Online

Just to add insult to injury, those of us struggling to pay our mortgage payments on our upside-down houses are now targets for the IRS.

I saw this little horror story in the Wall Street Journal, published September 1, 2009 written by Martin Vaughan.

God Bless America!


Audits planned for high mortgage deductions
NEW YORK – Sept. 2, 2009 – The Internal Revenue Service plans to increase audit reviews of some homeowners. If a taxpayer’s bank reports mortgage interest to the IRS and the amount is too high compared to the taxpayer’s reported income, the IRS wants to know why. In some cases, homeowners with high interest don’t file a tax return at all.

The Treasury inspector general for tax administration released a memo Monday announcing plans for the review. He noted that thousands of homeowners paid more than $20,000 in mortgage interest in 2005 according to the bank that lent them mortgage money; yet they failed to file a federal tax return.

The move is not without its critics.

“We shouldn’t presume that these struggling families are tax cheats just because they continue to make their mortgage payments despite losing their income,” says Rep. Charles Boustany (R–La.), the top minority member of the House Oversight Subcommittee.