How should I proceed if I estimated the wrong IRS tax amount for my mortgage interest? 2 Answers as of August 22, 2011I estimated my mortgage interest and it was wrong, now I am being audited. I may owe $15 -20,000. At this point I have only received a letter From the IRS asking for documentation. I have asked for more time to gather records. How should I proceed?
Steven J. Fromm | Steven J. Fromm & Associates, P.C.
Estimates of interest paid do not cut it with the IRS. Your actual interest payments are the only amounts deductible. You will end up biting the bullet here with additional taxes, interest and various penalties.
Answer Applies to: Pennsylvania