I deducted a VA funding fee I paid in '09 on my 2009 tax return. According to publication 936, VA mortgage insurance is known as a funding fee and is fully deductible in the year paid as qualified mortgage insurance. However, this year I received a letter from the IRS stating that my mortgage insurance deduction for '09 was corrected to $0 and that I owed more than $4K in back taxes for 2009. I replied with a copy of my HUD-1 showing the VA funding fee paid and the page from IRS pub. 936 showing that the VA fee paid was considered mortgage insurance and was fully deductible in the year paid. The IRS replied back with a letter requesting to see a copy of my "corrected" 1098 showing the mortgage insurance paid. However, my bank (Chase) replied in an e-mail that they do not put VA funding fees on their 1098's (even though I referenced IRS instructions for 1098 that these fees should be included in box 4 if over $600). Chase said they were sorry and could not comply with my request for a corrected 1098. My question, can the deduction for mortgage insurance be taken if not on the 1098?