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Never hurts to be reminded of the basics and to reinforce our knowledge, even if the information is a projected adjustment to the existing penalties. It's often the simple mistakes that blindside us.

This is absolutely true.

Then you have IRS agents that allow you (wink wink) to recreate a mileage log and then there the ones that cut you no break.

To me it seems like the guy created both the calendar and the mapquest log two years after the fact. So I file a tax return, get an audit notice, so I pull up a blank calendar from the internet, circle some dates, and pretend I went there those days. Very different than if I had a real calendar I actually used that year showing my appointments at various places each day. In that case, even if I guessed at my mileage when I filed (you know, the numbers on the ceiling), I could visit mapquest to create a true mileage log. Of course, how does the auditor know it's a real calendar? Electronic calendars have date stamps, but lots of business people still use paper weekly or monthly planners. Maybe just having one of those for a year or several proves your trips were real (hard to buy a Mead calendar for 2013 when it's 2015). Wonder if a regular guy or gal who just started a business and worked to round up customers would be given more slack than a CPA, who definitely should know better.

Wow, you learn something new here everyday. It wasn't my question, but thanks everyone for the learning experience.

Adding to my post above, I'd probably deduct it. I don't think the character of the loan or its terms are changed simply because it was inherited. It is still a reverse mortgage, and if it is still in the estate the administrator or executor would handle it the same way the decedent would if still living, and in the heir's hands he is still bound by its terms and is required to pay it off within a certain time frame. From pub 936: Reverse mortgages. A reverse mortgage is a loan where the lender pays you (in a lump sum, a monthly advance, a line of credit, or a combination of all three) while you continue to live in your home. With a reverse mortgage, you retain title to your home. Depending on the plan, your reverse mortgage becomes due with interest when you move, sell your home, reach the end of a pre-selected loan period, or die. Because reverse mortgages are considered loan advances and not income, the amount you receive is not taxable. Any interest (including original issue discount) accrued on a reverse mortgage is not deductible until you actually pay it, which is usually when you pay off the loan in full. Your deduction may be limited because a reverse mortgage loan generally is subject to the limit on Home Equity Debt discussed in Part II.

AGREE

Sounds like they need a new corporation and a tax-free merger. Find a good business lawyer.

The estate would deduct it if it's still in the estate. If the house has been passed out of the estate, then the new owners can deduct it if they don't already have a second home. I guess if they have a second home you could call it investment interest. Hopefully, it's still in the estate.

I do miss the smell of NCR paper. Aaaaaahhhh! Oh, and mimeograph sheets that we used to get in school where the print was purple. Good times!

Totally not feasible. No email, no online backup, no research, etc. When the internet goes down, we're not quite dead in the water, but we are severely limited.

https://www.irs.gov/uac/newsroom/scam-phone-calls-continue-irs-identifies-five-easy-ways-to-spot-suspicious-calls "If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov." https://www.irs.gov/uac/stay-vigilant-against-bogus-irs-phone-calls-and-emails "You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add "IRS Telephone Scam" to the comments of your report."