In December 2015, the IRS and Treasury accepted related requests for guidance from the Mortgage Bankers Association and the American Bankers Association into the Industry Issue Resolution (IIR) Program. The issue accepted for IIR was the proper reporting of interest under IRC 6050H. In particular, the issue accepted was the extent to which interest is included in payments that are made where accrued but unpaid interest has been treated for non-tax purposes as increasing the unpaid principal balance of a mortgage loan (for example, following a significant modification of the loan). See IIR Issue Selected 12-29-2015 on IRS.gov.
The IRS and Treasury have decided to address the issue through the formal guidance process, and are terminating the IIR project. Interested stakeholders will have the opportunity and are encouraged to submit relevant information and provide comments for the public record, using formal guidance input channels.