The irs wont bother with it, they really could care less because the dollar amount isn’t worth the labor costs. If someone has 1k a year of mello roos and 80% of it is deductable, yet they deduct the whole thing, then they deducted 200 that they shouldn’t have. It was not malicious, their bill would be a whole $50 to the irs, yet it cost the irs a grand in labor to deal with it, just not worth it. Same goes for your vehicle registration, you are supposed to subtract the non value based portion and deduct only the remainder, most people just deduct the dollar amount they see on their vehicle registration card in their glove box and the irs doesn’t really care.

Plus there are more people inflating their charity deduction than the mello roos folks.

They will likely just change the tax code to allow mello roos as a deduction, since it basically is treated that way now. They already changed the code to allow the deduction of PMI.

Mello roos sucks, but if you are a buyer of resale property, you can factor the payment, then figure the dollar cost and reduce your offer by that amount. If you have to pay the same amount for a mello roos house vs a non mello roos house, the go with the non, but if there is a discount because of it, if that discount makes the two houses cost the same as far as the monthly payment, then live where you want to live.