Can an IRS disallow Home Mortgage interest deduction?

A couple of month ago IRS sent me a worksheet to recalculate deduction since I have refinanced my house in Dec 2010 and they had some questions. After filling out the worksheet and applying IRS allowed deduction on the worksheet, it came out that I did not deduct enough and am owed money. I have sent IRS all the documents they requested and they have acknowledged the receipt of those documents. Today I get a letter from the same guy with his adjustment calculations of my tax return completely wiping out the Home Mortgage Interest deduction and telling me I owe $26000 with penalties. Has home mortgage interest deduction been disallowed in 2010 or is that IRS harassment and or incompetence?

Burlingame, CA -

Attorney Answers (3)

E. Martin Davidoff

E. Martin Davidoff

Tax Lawyer - Dayton, NJ
Answered

I agree with the previous answer in that you need to contact a tax attorney. Alternatively a CPA experienced in taxation can assist you. In the meantime, read the communications carefully and make certain you take advantage of your appeal rights.

Not all mortgage interest in deductible. When you refinanced, how you spent any excess funds may impact on the matter. You should get a consultation with someone to determine . Our firm could assist you as we know these rules inside and out. But, of course, I am sure there are many firms in CA who can assist you. Good luck.

Marty Davidoff, emd@taxattorneycpa.com, 732-274-1600. This answer is provided for general information only. You... more
Bruce Givner

Bruce Givner

Tax Lawyer - Los Angeles, CA
Answered

Even though he is in New Jersey, you should hire Mr. Davidoff. He gave you a terrific response.

Ronald J Cappuccio

Ronald J Cappuccio

Tax Lawyer - Cherry Hill, NJ
Answered

This is a favorite issue of the IRS. They typically do this by a mail audit. Since most people do not fight it, the IRS makes a lot on this. You need to appeal within the IRS. Please, IMMEDIATELY contact a Tax Attorney to make this appeal for you. Do not delay.

Ron Cappuccio
www.TaxEsq.com

If you do not like this answer or disagree, please look at one of the other answers provided. It is not necessary... more

Questions? An attorney can help.

Ask a Question
Free & anonymous.
Find a Lawyer
Free. No commitment.