The IRS is stepping up its creativity by utilizing resources that stem beyond the basic IRS database. Recently, the IRS announced that it plans to expand a program that cross-references between the IRS database and mortgage payment databases to catch any inconsistencies.

The Treasury Inspector General for Tax Administration announced that the IRS will use the mortgage-interest payment databases to inspect and find non-filers as well as people who reported less income than they paid in mortgage interest. Starting regionally, the IRS will examine more closely the databases to find any IRS tax inconsistencies. The program is scheduled to be implemented nationwide by December 2011.

According to WSJ, “The Treasury inspector general said in a Monday report that tens of thousands of homeowners who paid more than $20,000 in mortgage interest in 2005 either didn’t file a tax return or reported income that appears insufficient to cover their mortgage interest and basic living expenses. The data for 2005 was the latest tax data available when the Treasury inspector general’s office began its audit last year. Based on a sample of these returns, nonfilers and potential under-reporters identified by the inspector general could have owed a combined total of $1.4 billion in tax, penalties and interest, the auditor said.”

The problem with this initiative, one of many “Compliance Initiative Projects“, could be that many lawful taxpayers who have lost their jobs but have been living off of their savings may be audited by the IRS. Taxpayers with ample savings who are still able to make mortgage payments despite being unemployed may be suspected of tax evasion by the IRS who cross-references between these databases.

This could be very problematic for the innocent taxpayer. If you find yourself under IRS scrutiny, you will have to prove your innocence to them. In the current economic climate, it’s extremely important for taxpayers to not only pay their taxes, but also to resolve their existing IRS tax problems immediately before they get out of hand.

“We shouldn’t presume that these struggling families are tax cheats just because they continue to make their mortgage payments despite losing their income,” said Rep. Charles Boustany, the ranking minority member on the House Oversight Subcommittee.

Tax Resolution Services is a team of CPAs, tax attorneys, and tax resolution specialists who will help you with your IRS tax problems. Whether the IRS wrongfully accused you of tax evasion or you have years of back taxes, we will help you get the tax settlement you deserve. You can contact us at at 866-477-7762 or visit our website: www.taxresolution.com

More Tax Help, IRS News and Tax Relief Tips:

1. Tax Help News: IRS Enforcement to Get Priority, Big Bucks in 2010
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3. Retire Your IRS Back Taxes Forever: How Tax Resolution Services Helped Save a Taxpayer $130,000
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5. Tax Help For Taxpayers Short on Cash: Filing a Tax Return Late is Better than Filing a False Tax Return

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