VA Funding Fee (IRS bill for back taxes from 2009)
I deducted my VA funding fee of $8,085.00 back when I completed my 2009 tax return based on Q&A on turbotax that it was tax deductible since it was essentially prepaid mortgage insurance. The IRS bill I got today indicates my mortgage insurance deduction on my 2009 return was $8,085.00, but the IRS corrected it to $0.00. Now I owe $4,221 in back taxes. I checked with my mortgage company (chase), their policy is NOT to put VA funding fees on the 1098, just if you have regular mortgage insurance (that's probably the reason the IRS has no record of it). Is/was the VA funding fee deductible?