IRS will use mortgage payment data to catch tax cheats

IRS has decided to expand the program which was designed to catch tax cheats. Under the new program, inconsistencies between mortgage payments and income would be searched for. IRS would study whether or not it should use mortgage-interest payment data provided to it by banks in order to catch tax cheats.

This data can also be used to catch those consumers who report less income than they paid in mortgage interest. The IRS is also planning to expand the regional research project on mortgage interest to a countrywide level by December 2011. This initiative is also known as Compliance Initiative Projects and would involve examination of a small number of tax returns to assess new strategies.