I'm wondering if anyone else has noticed an audit of mortgage interest expense for residences where the loans have exceeded $1.1M with regard to the new "definition" per the IRS Chief Counsel memo from last September (2009). If this is an IRS "project," it appears to be coming out of the Andover service center.
Yes - I've picked up two new clients this year because they were audited for this very thing. Both returns had been self prepared in the past. One taxpayer missed it completely, the other couldn't understand the allocation rules and chose to ignore them. Both got caught.
On a slightly related note - I've also noticed an increase in the assessment of penalties and a significant decrease in the willing to abate penalties, by both the Feds and various states. I expect this to get worse in the next year or two or three, then possibly settling down as the economy improves.
As the government's response to economic downturns is to INCREASE their spending they have to contend with the shrinking of taxes via regular channels - If a taxpayer was making $200K and is now only making $150K they may have their head above water but they aren't paying as much in tax as before AND their personal spending has slowed so they aren't feeding the economy, which in turn would be paying taxes on the money. Hence, the authorities are left with few ways to close their spending gap - their answer is, and usually seems to be, to move toward stricter enforcement.
Gene E. Utterback, EA, RFC, ABA
Are you talking about
BeanSmart website is not affiliated with any of the manufacturers or service providers discussed here. All logos and trade names are the property of their respective owners.