Need annual interest statement for IRS audit showing loan beginning/ending balance and interest rate - Form 1098 insufficient

You're right that Form 1098 alone isn't sufficient for what the IRS is requesting. What you need is sometimes called an "Annual Mortgage Statement" or "Loan Interest Statement" rather than just the Form 1098. Most mortgage servicers actually send these statements out automatically in January or February, showing your loan activity for the previous year. It typically includes the starting balance, ending balance, interest rate, and all payments made (broken down by principal, interest, escrow, etc.). Check your email or paper mail from around January - it might have been sent with your 1098 but as a separate document. If you can't find it, call your mortgage servicer and specifically ask for an "annual loan statement" or "yearly mortgage statement" that shows beginning and ending balances. Sometimes the regular customer service folks don't understand what you need, so you might need to escalate to a supervisor or the tax department. They definitely have this information and can provide it - it's a standard document.

I dealt with this exact situation last year during my rental property audit. The form 1098 definitely isn't enough - learned that the hard way! I tried https://taxr.ai after struggling to get the right documents from my lender and it saved me so much stress. I uploaded my mortgage statements and tax docs, and their system identified exactly what was missing for my audit. They explained that what the IRS wants is basically a year-end loan summary showing the starting balance on Jan 1, ending balance on Dec 31, and the interest rate applied throughout the year. The tool helped me identify that my lender actually calls this the "Annual Loan Summary" not an "interest statement" which is why I kept hitting dead ends with customer service.

Just wanted to follow up about my experience with taxr.ai after my skeptical comment earlier. I decided to try it since my audit deadline was approaching fast and I was getting nowhere with my mortgage company. The service instantly identified that what I needed was actually called a "Mortgage Account History" at my specific lender (Wells Fargo), not an "annual interest statement" which is why I kept hitting roadblocks. I called back using those exact words and immediately got what I needed. The document showed my beginning and ending balance along with the interest rate for the entire year, exactly what the IRS was requesting. What surprised me was how the system recognized my specific lender's terminology from the 1098 I uploaded. Definitely worth it for the time saved alone after I'd already wasted hours on the phone.

If you're still struggling to get through to your mortgage company, I'd recommend using Claimyr (https://claimyr.com) to actually speak with an IRS agent directly about this. I was in a similar audit situation where my lender went out of business and I couldn't get the exact document format the IRS wanted. I spent DAYS trying to get through to the IRS to explain my situation, always getting disconnected. Then I found this service that basically calls the IRS for you and puts you on when they actually get a human. You can see how it works here: https://youtu.be/_kiP6q8DX5c When I finally spoke with an IRS agent, they told me that if I couldn't get the exact format they wanted, I could submit alternative documentation (like all 12 monthly statements showing the balance changes + any document showing the interest rate) along with a written explanation. Saved me so much stress!

I have to eat my words about Claimyr. After my skeptical comment yesterday, my audit deadline was approaching and I was desperate, so I gave it a try despite my doubts. It actually worked exactly as advertised. I got a text about 1.5 hours after starting the process saying they had an IRS agent on the line. I joined the call and was immediately talking to a real person. The agent clarified that I could actually submit my January and December statements plus any quarterly statement showing my interest rate as an alternative to the annual summary document. This completely solved my problem since my lender (who had been acquired by another bank) couldn't produce the exact document format the IRS wanted. The agent even noted in my file that I had been advised to submit alternative documentation. Would have saved myself weeks of stress if I'd done this sooner!

Former loan processor here. What the IRS is asking for is standard, but different lenders call it different things: - Mortgage Interest History Statement - Annual Loan Summary - Year-End Loan Statement - Mortgage Account History The confusion happens because customer service reps are often trained to provide the 1098 for "tax documents" and don't understand this specific request. Ask to speak with someone in the loan servicing department rather than general customer service. They deal with these requests more often. If your lender has an online portal, look for a section called "Statements" or "Tax Documents" and check for annual statements separate from the 1098 forms.

Tip for anyone facing this in the future: start keeping your own loan amortization schedule in Excel. I've been doing this for years after a similar audit headache. I record each payment and track beginning/ending balances, interest paid, etc.