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The Internal Revenue Service made it known they could choose to make use of mortgage interest payments to recognize tax payers who did not file returns. If you did not file, are self employed and did not give an account to the Internal Revenue Service but paid mortgage interest because you own a home, then you have an income. According to the Internal Revenue Service this is proved because you have the means to pay a mortgage. If the Internal Revenue Service does not have evidence you filed a return they assume your tax returns are missing and your income is unreported.
The opinion of a tax expert was the Internal Revenue Service was displaying aggression towards the cash economy. In essence, the Internal Revenue Service was getting at tax payers who are self-employed entrepreneurs who were unable to file tax returns. The reasons for not filing returns were out of their control and consisted of business malfunctions, divorce and medical troubles. These are issues that do not fit into any exact category. It is possible for mortgage interest to be covered by a non-taxable cause. Examples would be living from existing finances through a period without work and the refinancing of a property. However, studies have shown there are individuals who have income and cover mortgages but do not file tax returns.