IRS and the Interest Deduction

[msmith1199]

Anybody else having issues with the IRS on the mortgage interest deduction for the motorhome as a second home? My motorhome is financed through Wells Fargo Bank. For the entire life of the loan they have never sent me a 1098 for the Interest. I just get an end of year statement with the total interest paid, and I take the deduction. A couple of months ago I got a letter from the IRS with a bill and an explanation that the 1098's that were reported to them for mortgage interest do not match the amount I reported. They said to send in a written explanation if I didn't agree.

So I prepared the written explanation and attached a copy of my end of year statement and sent it all in. Well today I get the same letter saying based on my response I still owe them $1100. They say the documents I sent don't support the deduction.

Anybody else have this problem? Does your lender send you a 1098 for mortgage interest on the motorhome?

On Edit: I should have said form 1098 and not 1099 so I changed them.

[wnytaxman]

Cool. Life is Good.

[msmith1199]

Got my letter today from the IRS confirming the problem was resolved and amount of tax owing is $0. And yes I'm surprised it was that easy.

[brendamosher]

We bought our motorhome through Camping World and they set up the financing with Bank of the West. They refused to send a 1098 and would only send a yearly interest statement. I received the letter from the IRS and replied with a letter containing a copy of the interest statement, a complete description of our class A motor home and a copy of the IRS tax law that describes the deduction of the interest paid for our motor home. I mailed it return receipt requested and got a reply in about 4 weeks saying they received my letter. It took them another 2-3 weeks to send me the determination of CASE CLOSED...
0$ OWED! Since the bank refuses to send the 1098, I assume I will get these letters every year so I will just photocopy these papers and send them on to the IRS each year they contact me. Hope this helps.
I'm mad that Camping world didn't tell us about what we had to look forward to because I'm sure they have had many calls from other customers with the same problems considering they set up the financing with this bank.

[wnytaxman]

Cool. Sometimes the system actually works. I'm glad you got to a person who was willing to help.

I would have to agree that sending another letter at this point may make things worse. I'd just hold off and see if you do get any more correspondence and then react accordingly.

Again, I'm happy it worked out for you.

[msmith1199]

Old-Biscuit wrote:

msmith1199 wrote:


So what are the bets; Do I actually get a letter saying everything is fine, or do they send me a letter asking where my check is? I guess I'm just a skeptic. I've called the IRS before with issues and never got anything resolved that fast. Is it possible the IRS is actually efficient now?

My bet.....you will get 2 letters
First one will be a demand letter because you haven't responded to the most recent letter that gave you until the end of the month to pay up or appeal.
And the second letter will be one stating your problem has been resolved. But it won't arrive until several weeks after the demand letter.

Send a reply letter with:
A copy of the explanation letter
A copy of the bank statement
And a new letter explaining that the issue was resolved per phone call on 1/9/2014 @ 9:00 AM with such and such and that you are happy this issued was resolved.

Never assume anything when dealing with the IRS :B

I don't know about that. I think sending a new letter with all that info would cause me to run more of a risk of somebody changing their mind or it getting screwed up. I got the guys name and ID number and he told me he was able to update it himself in the computer while I was on the phone, so although I'm a skeptic, I'm going to wait and see if I get the letter before I do anything else.

[Old-Biscuit]

msmith1199 wrote:


So what are the bets; Do I actually get a letter saying everything is fine, or do they send me a letter asking where my check is? I guess I'm just a skeptic. I've called the IRS before with issues and never got anything resolved that fast. Is it possible the IRS is actually efficient now?

My bet.....you will get 2 letters
First one will be a demand letter because you haven't responded to the most recent letter that gave you until the end of the month to pay up or appeal.
And the second letter will be one stating your problem has been resolved. But it won't arrive until several weeks after the demand letter.

Send a reply letter with:
A copy of the explanation letter
A copy of the bank statement
And a new letter explaining that the issue was resolved per phone call on 1/9/2014 @ 9:00 AM with such and such and that you are happy this issued was resolved.

Never assume anything when dealing with the IRS :B

[dog_house_Jim]

Have the Bank write you a letter stating this interest expense is for your RV. Attach a copy of your loan papers that clearly identify the RV. Then attach pictures of the interior of your RV to show it meets the requirements to be considered a second home.

If they still refuse. request a office meeting with a supervisor.

hopefully you will have provided enough to settle this.

I am an enrolled agent, and have practiced before the IRS for 27 years. You have to tie everything together,

[msmith1199]

You aren't going to believe this! So I have a few hours this morning so I call the 800 number listed on my letter. You have to go through a lengthy phone tree making all kinds of menu selections but it wasn't too bad. After about five different selections I finally get to one that allows me to go to a real person if my question was not answered already. So then the hold music starts. After not more than 2 minutes on hold an actual real human answered the phone. He was able to pull my account up and see everything on his computer. What had happened was the received my letter of explanation, but the bank statement wasn't attached. So I'm guessing at the IRS they have automated letter openers in a secure room because of all the dumb things people send to the IRS, and someplace between the letter being opened and it getting to the auditor the bank statement got lost. So I tell the guy I can send another copy and he says no need for that. He asks me the name of the bank, what the loan was for, and how much interest I'm claiming. He didn't even want the account number. I told him the info and he said he updated my account and I don't owe any money and I'll receive a confirmation letter in four weeks. The entire phone call was about 10 minutes.

So what are the bets; Do I actually get a letter saying everything is fine, or do they send me a letter asking where my check is? I guess I'm just a skeptic. I've called the IRS before with issues and never got anything resolved that fast. Is it possible the IRS is actually efficient now?

[msmith1199]

tyoungs wrote:
When I had the same issue, I asked the bank to send me a letter stating the interest paid, and that the loan was on 20xx Holiday Rambler motor home. I included a copy of that letter with my response and it was accepted as resolution.

I may have to do that because I did send them the end of year statement, but no place on the statement does it say what the loan is for. It actually says "Personal Loan" on it. It's possible that is what the IRS has the issue with too. Sure would be nice if when the IRS responds to you they wouldn't just say, sorry that's not good enough, and instead tell you why it's not good enough and exactly what they need.

[tyoungs]

When I had the same issue, I asked the bank to send me a letter stating the interest paid, and that the loan was on 20xx Holiday Rambler motor home. I included a copy of that letter with my response and it was accepted as resolution.

[msmith1199]

I haven't done anything yet. I've been busy. The most recent letter gave me until the end of the month to pay up or appeal more. So when I know I have a couple of hours free I'll sit down and try calling them.

[wnytaxman]

Your lender can NOT issue a 1098 for RV loan interest. Those forms are for real property only. To require a bank to issue the form would require them to in essence certify that the RV qualifies as a second home which is far beyond the banks responsibility. Most, if not all, banks will not go out on that limb.

As to dealing with the IRS, it has become a much more difficult situation over the last several years. They have hired a lot of new agents who are not particularly well trained and many of them carry a chip on their shoulders that they will "get" the dirty taxpayers of the world. As such we find that we are taking many more cases to Appeals. Weighing the cost of taking an unreasonable audit to Appeals as opposed to just paying the tax becomes a matter of principle for many, but many times it isn't worth trying to make a point to an auditor who is not evaluated on cases going to Appeals and having Appeals overturn their audit. Frankly, there is no accountability for auditors and their supervisors.

I'd be curious as to how the OP is making out with his problem.

[rk911]

msmith1199 wrote:
Anybody else having issues with the IRS on the mortgage interest deduction for the motorhome as a second home? My motorhome is financed through Wells Fargo Bank. For the entire life of the loan they have never sent me a 1098 for the Interest. I just get an end of year statement with the total interest paid, and I take the deduction. A couple of months ago I got a letter from the IRS with a bill and an explanation that the 1098's that were reported to them for mortgage interest do not match the amount I reported. They said to send in a written explanation if I didn't agree.

So I prepared the written explanation and attached a copy of my end of year statement and sent it all in. Well today I get the same letter saying based on my response I still owe them $1100. They say the documents I sent don't support the deduction.

Anybody else have this problem? Does your lender send you a 1098 for mortgage interest on the motorhome?

On Edit: I should have said form 1098 and not 1099 so I changed them.

our lender never issued us a 1098 either...in fact they flat out refused. so I asked them for a principal/interest statement...an amortization schedule. I just added up the interest portions for the 12-monthly payments and used that figure for tax purposes. doing that will match the reported interest from your lender.

on schedule A there are two lines pertaining to mortgage interest deduction. on the 2012 sked A they were lines 11 and 12. use line 11 only if you receive an actual 1098 otherwise use line 12 and be sure to follow the instructions for line 12.

[msmith1199]

As long as they're former IRS and they know they have your best interests in mind, then I'd be fine with it. It's like if you ever get into trouble the best defense attorney to have can be one that was a former prosecutor. They truly know what works and what doesn't in court.

[wnytaxman]

msmith1199 wrote:

wny_pat wrote:

msmith1199 wrote:

wny_pat wrote:
After reading this thread, and the much throwing around the term "agent", makes me so glad that a retired, actual badge/credential carrying "IRS Criminal Investigation Special Agent" does my taxes.

You were with the IRS or your tax guys is a former IRS agent? I've worked with many of the Criminal Investigator guys and they are completely separate from the civil division that handles your taxes and tax forms. The criminal guys can't even look at your income tax forms without special permission from a Federal Judge through the US Attorney's Office. They can get a transcript easier, but not the actual return.

Note that I said he is retired. He worked both the civil and the criminal side before retiring.

I saw you said he was retired, I just couldn't figure out if you meant it was you, or this was somebody else. And if he worked on the civil side that's where he got his experience that allows him now to prepare taxes. The guys that work on the criminal side know less about taxes than I do. They have to go to H&R Block to get theirs done.

You are so correct in that comment. The CID guys/gals are not real well versed in the actual tax laws. They do a heck of a job of intimidation though!

One of the big problems that I have with former IRS agents doing tax returns is that their job was always to get MORE money for the government, not saving money for the taxpayer.