Qualifying for the Mortgage Interest Deduction. Mortgage interest includes that which you pay on loans to buy a home, on home equity lines of credit and on construction loans. The deduction is limited to interest paid on your main home and/or a second home. Interest paid on a third or fourth homes isn't deductible.
The statute of limitations on how far back the IRS can audit (called the Assessment Statute Expiration Date or ASED) varies depending upon the circumstances of the tax return. In most cases the IRS will not go back more than 3 years unless there is something very wrong with the tax return that was filed.
The IRS tries to act on audits as quickly as possible. This means that most audits happen on returns filed within the last two years. Exceptions to the Three Year Statute of Limitations. The IRS has the right to audit back as far as six years if the taxpayer omitted more than 25% of their income for a single year. Taxpayers who leave out greater than $5,000 earned in foreign countries may also be audited as far back as six years. Not filing a tax return is not a good way to avoid an audit.