IRS to Mine Payment Data on Mortgages (paying mortgage will increase chances of audit)

Wall Street Journal ^ | September 1, 2009 | Martin Vaughan

[bamahead]

The data could also be used to target for audits individuals who don't file tax returns...the IRS plan could snare taxpayers who have coped with job losses by borrowing or using savings or retirement accounts to make their house payments.

Ahh yes, if they don't have any liquid wealth to tax, go after the assets instead.



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[ClearCase_guy]

They asked Willie Sutton why he robbed banks. He said, "That's where the money is."

The IRS wants money -- they will ignore the deadbeats, and go chase the people who actually pay their bills. That's where they money is.

Government is a criminal operation and should be prosecuted under RICO.

[reaganaut1]

What’s reported to the IRS by lenders is mortgage interest, and since many people do claim the mortgage interest deduction, it is reasonable for the government to get such info from banks to check that interest deductions are reported correctly. What I am very wary of is the government using the mortgage interest data for other purposes.

[sr4402]

"The Paid Off Home Mortgage has Replaced the BMW as the Status Symbol of Choice"

Somebody do a Dave Ramsey Ping. If the government is going to look over your shoulder, it is time to pay off the stupid things.

[thulldud]

Trouble is that they plan to infer an income level based on that mortgage interest, so if somebody happens to report an income less than 3x (for ex.) the mortgage interest, that one is flagged for an audit.

Y'see, little people have to pay their interest bills with real income, unlike the feds, who are on the point of borrowing the money to pay the interest on the national debt.

[Munz]

it just doesn’t pay to be a responsible person anymore.

[no-s]

.....the increased accounting costs are paid by YOU.

Really the key point. Information might want to be free, but it doesn't come for free. Ergo it's a tax and a waste of productivity and ultimately a theft of our labor. It's just slavery, really.

Grr. The state franchise tax board of california recomputed our 2007 tax liability for reasons yet unknown. They did this on friday (aug 28) and then sent a withholding notice to my employer received yesterday (aug 31). The amount matches the amount of a payment we made for 2007 in Feb. 2008, said payment cashed and applied already.

We speculate this is a purposeful scheme designed to extract extra cash from us, acknowledge the error, and hold (i.e. use in cash reserves) the amount until the 2009 return is sent in, where it will be applied/refunded.

I don't think we're just paranoid. They've attempted the same trick 4 times in the last 12 years. In the second attempt the employer didn't let me know until the amount had been deducted (and they erroneously took the full amount of my check and sent it off to the state!). We didn't get the cash back for 17 months!

If the state doesn't lift the order in time we're filing new withholding forms and reserving the net estimated tax liability in escrow. We'll fix it at the end of the year.

[timestax]

bttt